Reuters reported that PetroChina Co Ltd is in talks to buy Valero Energy shuttered refinery in Aruba, the latest move by China oil giants to take advantage of a global refining downturn to beef up supply.

PetroChina, Asia largest oil and gas producer has made a string of overseas refinery acquisitions in the past few years to strengthen its global refinery foothold and boost its trading and marketing capabilities.

In a filing with the US Securities and Exchange Commission, Valero said it had received a non-binding indication of interest for the 235,000 barrel per day Aruba plant for USD 350 million plus working capital, but did not identify the interested party.

Sources familiar with the negotiations said the approach had been made by PetroChina. It was the second time in two years the Chinese company had discussed the purchase of the plant, which is located near Venezuela, China fourth largest crude supplier.

A local media website, Amigoe reported that PetroChina signed a memorandum of understanding with the government of Aruba on April 30 2012, but details of the deal had not been made public yet due to the sensitive nature of the negotiations.

A plant source with knowledge of the negotiations said the agreement is 90% completed. He added that the final signing of the agreement, which also includes the refinery docks, storage tanks and other assets in the Caribbean prized for its strategic location, could happen in about a month.”

PetroChina was not immediately available for comment.

Energy bankers and analysts say Chinese oil giants, which have been suffering heavy refining losses at home due to state-controlled oil products prices, are pushing into the overseas refining sector to optimize their refinery operations and maximize the value of crude they produce overseas.

Source - Reuters

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