Venezuela and China boost ties with refinery deal

By Brian Ellsworth

CARACAS, May 10 (Reuters) - Venezuela and China have agreed to build a refinery in China to process Venezuelan oil, advancing leftist President Hugo Chavez's push to boost ties between the OPEC nation and one of the world's fastest-growing energy consumers.

Chavez, a self-styled revolutionary and harsh critic of Washington, has increased energy and commercial ties with China to reduce Venezuela's traditional reliance on energy markets in the United States.

In a ceremony late on Friday, Venezuelan state oil company PDVSA and the largest Chinese oil and gas company PetroChina (0857.HK: Quote, Profile, Research, Stock Buzz) agreed to build a 400,000 barrel per day refinery in China's Guandong province.

"Fifteen years ago people said it was impossible to take Venezuelan oil to China because it was too far and the costs made it impossible," Chavez, flanked by Chinese Vice Premier Hui Liangyu, said in a televised address.

"We've destroyed that deception, which came from Washington."

China's deep pockets and its need to ensure future energy supplies, along with Chavez's desire to diversify Venezuela's trade away from the United States, have brought Caracas and Beijing together.

China this year lent $4 billion to Venezuela, which the South American country will repay in fuel, to create an investment fund for development projects such as improvement of rural roads and expansion of fishing.

Chavez has offered unconditional political support to China, describing widespread protests in Tibet as Washington-backed efforts to harm the Beijing Olympics.