Venezuelan President Hugo Chavez says his country will build an oil refinery in energy-starved Nicaragua.
Mr. Chavez said late Thursday that Venezuela will be a minority partner in the planned refinery, which he expects to process up to 150,000 barrels of oil a day. He said Nicaragua will have the right to export any surplus oil after the country meets its energy needs.
The Venezuelan leader added that the income from any surplus could help Nicaragua wean itself from International Monetary Fund loans.
Venezuela's proposal adds to a previous promise to build electricity generating plants and factories in Nicaragua.
These projects mark the first steps of a trade pact Nicaraguan President Daniel Ortega signed with Venezuela, Bolivia and Cuba. Mr. Chavez established the initiative known as the Bolivarian Alternative for the Americas, or ALBA, to counter a U.S.-backed free trade deal.
Mr. Ortega's return to the presidency 17 years after he was voted out of office gives President Chavez a left-wing ally as the Venezuelan challenges U.S. influence across Latin America.
The Nicaraguan leader says he hopes for increased trade with all countries, including the United States.
Some information for this report was provided by AP and Reuters.