* Essar to supply refined fuel to Petrochina in debt deal
* May look at taking Latin American crude from Petrochina
Essar Oil Ltd will sign a $1 billion loan deal with China on Tuesday that sources with knowledge of the matter said would be backed by supply of refined products to top state oil producer PetroChina.
Essar Oil could sign a preliminary agreement with China Development Bank (CDB) on Tuesday to borrow that amount during Chinese Prime Minister Li Keqiang's visit to Mumbai, his first foreign trip, the sources said.
The Indian firm, controlled by billionaire brothers Shashi and Ravi Ruia, has been replacing its rupee debt with lower-cost, overseas loans and has so far refinanced $481 million.
"As part of our initiative to dollarise our debt, we have been in discussion with several international banks, including Chinese banks. CDB is part of that conversation," Essar Oil said in a statement on Monday in response to an article in the Economic Times. It declined to confirm the deal.
The group hopes to refinance another $1.8 billion within the next three to six months, Essar Oil chief executive L K Gupta had said on May 10.
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