OREANDA-NEWS. State-owned PetroEcuador is looking for ways to finance an alkylation plant that it wants to install at its newly overhauled 110,000 b/d Esmeraldas refinery.

The company?s $1.62bn budget for next year is nearly flat with 2015, and the funds will mostly cover operating expenses.

PetroEcuador plans to complete priority infrastructure projects already under construction, such as the 215km (134mi) Pascuales-Cuenca refined products pipeline. New projects such as the alkylation unit will need external financing.

Next year the firm "will focus on small investment programs with potential to have a broad financial impact. To finance capex spending in 2016, we need to be more creative," PetroEcuador chief executive Alex Bravo told Argus.

The firm is seeking investors to help finance its largest projects, including a $1.5bn three-year program to improve the quality of its refined products.

The first phase of the program features the planned alkylation unit, which could be financed through credit from contractors or by creating a joint venture, Bravo said.

Ecuador is weighing other alternatives to help finance the project, including an off-take agreement, according to a strategic sectors ministry presentation for investors seen by Argus.

By adding octanes to gasoline, the new unit would help Ecuador meet a targeted 22.6pc reduction in 93-octane gasoline imports. Between January and October 2015, PetroEcuador imported an average of 39,000 b/d of 93-octane gasoline.

The imported fuel is used to blend into locally refined gasoline to produce the 92-octane Super gasoline.

With the new infrastructure in place, PetroEcuador would be able to produce a 92 to 95-octane gasoline with 1pc benzene, the strategic sectors ministry says.

The fuel quality improvement program will includes a plan to import 28°API sweet crude to process at Esmeraldas in order to optimize its product yield.

PetroEcuador has said it is seeking to purchase 30mn bl of medium crude for one year, but the plan could be extended for several years until oil prices recover, a company official told Argus.

The firm is cutting costs through the planned sale of some 41 service stations and staff reductions. Some 377 workers out of a total of 5,100 have been laid off this year, and further cuts lie ahead.