Oil report

UPDATE 1-Correa says Ecuador's Pacific refinery on track

* Project has estimated cost of $12.5 billion

* Will be joint venture with Venezuela’s PDVSA (Adds quote, details)

CARACAS, Dec 14 (Reuters) - A $12.5 billion refinery project in Ecuador is on track and the government hopes to secure financing next year and choose a builder, President Rafael Correa said during a visit to Venezuela on Tuesday.

The Pacific Refinery is a joint venture with Venezuelan state oil company PDVSA and is one of the biggest investment projects that Correa is working on with his leftist ally Venezuelan President Hugo Chavez.

“(The project) is progressing and progressing on schedule. We have started the infrastructure works and we hope that in 2011 we will totally complete the financing, launch a bidding process and search for a builder,” Correa told reporters.

The head of Ecuador's state oil company Petroecuador told Reuters last year that Deutsche Bank AG DBKGn.DE and China Import-Export Bank were interested in financing $3 billion and $2 billion, respectively, for the project. [ID:nN23157434]

Chinese and South Korean companies have also expressed an interest in financing and constructing the project.

Petroecuador and PDVSA created a joint venture for the refinery, which is expected to have the capacity to refine 300,000 barrels per day of crude oil. Petroecuador holds 51 percent in the project and the Venezuelan company 49 percent.

Chavez and Correa, a left-leaning former economy minister, have signed agreements for other oil development and exploration projects and energy sharing deals as both OPEC nations seek to bolster crude production and reduce costs.

The Pacific Refinery project is intended to cut domestic fuel costs for Ecuador, which pays a high price to import some oil products because of its low refining capacity.

Editing by Sofina Mirza-Reid