Nicaragua's legislature has approved a bill authorizing construction of an oil refinery, an inter-oceanic pipeline and other facilities, a $6.6 billion project to be partially funded by close ally Venezuela.

According to the bill, approved Thursday by a vote of 80-4 with one abstention by the Sandinista-controlled unicameral National Assembly, the "Bolivar's Supreme Dream" industrial complex in the Pacific region will include a plant for receiving, storing and distributing hydrocarbons.

It also will house liquefied petroleum gas filling/distribution plants, a petrochemical plant, an inter-oceanic pipeline terminal and "all the other industrial works and installations needed to develop a refining and petrochemical industry," the bill states.

In July 2007, leftist President Daniel Ortega and Venezuelan counterpart and close ally Hugo Chavez laid the cornerstone for the refinery, initially located in Piedras Blancas, not far from Puerto Sandino on Nicaragua's Pacific coast.

The construction site was later moved to another nearby coastal area known as Miramar after French firm AXENS determined that location to be more suitable.

Jenny Martinez, member of the ruling Sandinista party and chairwoman of the National Assembly's infrastructure committee, explained in a plenary session that the complex will be developed by the Alba de Nicaragua S.A., or Albanisa, joint venture.

PDV Caribe, a unit of Venezuelan state oil giant PDVSA, has a 51 percent stake in Albanisa, founded in Caracas on June 17, 2007, while Nicaraguan state oil firm Petronic holds the remaining 49 percent interest.

Albanisa is an outgrowth of the Bolivarian Alternative for the Americas, or ALBA, conceived by Chavez as an alternative to the - now moribund - U.S. proposal for a Free Trade Area of the Americas.

The project is divided into three construction phases.

The first, which is roughly 20 percent complete, entails construction of a fuel handling, storage and distribution plant, an LPG filling plant and the oil refinery complex, Martinez said.

An inter-oceanic pipeline traversing Nicaraguan territory will be built in the second phase, including storage and distribution centers in the country's Caribbean and Pacific regions, she said.

A petrochemical industrial complex will be built and developed in the final phase, the lawmaker added.

She said the project has undergone 40 coastal and marine environmental impact assessments and tsunami computer simulations with 20-meter-tall (65-foot-tall) waves have been conducted.

Last week, the Humboldt Center, a Nicaraguan environmental NGO, said construction of a refinery in the Central American nation is unviable due to the "potential (environmental) impacts."

The NGO said the project is located "in an area at high risk of earthquakes, tsunamis and volcanic eruptions."

The refinery will have the capacity to refine 150,000 barrels per day of crude from Venezuela, one of the world's leading oil producers.

Of that total, 50,000 bpd will supply the Nicaraguan market and the rest will be exported to other Central American countries, according to the government, which will declare the construction site of public use and social interest.

The industrial complex will create 1,500 direct jobs and 15,000 indirect jobs during the construction phase and 1,500 direct jobs and 6,000 indirect jobs during the operational phase, the bill says.

The joint venture also will be fully exempt from property tax during the complex's first 10 years of operation. That exemption will be gradually removed and eventually eliminated 25 years after the start of the project. EFE