China will build an oil refinery in Costa Rica to help the Central American nation address its energy needs, Costa Rican President Oscar Arias announced.

Arias told Mexican Reforma newspaper, in an interview published on Saturday, the agreement with China means the chances for completion of an earlier Mexican refinery project in Costa Rica 'have now been significantly reduced.'

Former Mexican President Vicente Fox planned to build an oil refinery in Costa Rica as part of a regional energy program during his six-year tenure that ended in 2006.

'The Chinese project is significantly less ambitious and will serve just to address Costa Rican needs,' said Arias who was making an official visit to China.