Ecuador and Venezuela have reached agreement to build a refinery in Ecuador with a price tag of around $5 billion, Ecuador's Oil Minister Galo Chiriboga said Thursday.

Speaking to reporters ahead of a meeting of OPEC oil ministers in Vienna Friday, Chiriboga said the refinery should take about four years to build.

"We have reached an agreement and the feasibility study will start in June," he said.

The refinery will process about 300,000 barrels of crude a day, he said.

Ecuador and Venezuela have been moving to deepen energy cooperation. PdVSA and Petroecuador said earlier this month they would accelerate the building of a new refinery in Ecuador.

While Ecuador, which recently returned to the Organization of Petroluem Exporting Countries after a long hiatus, produces around 510,000 barrels of oil a day, it doesn't have enough refining capacity to cover domestic demand for derivatives. As a result, it expects to import $3 billion of fuel derivatives in 2008.

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