Ecuador is set to bank a $1 billion dollar advance payment after signing a crude oil export deal with China.

"Petroecuador has signed a supply contract ... with state-run company PetroChina for two years," Petroecuador said in a statement, adding that Ecuador will receive the $1 billion in the first week of August.

Under the terms of the contract, Ecuador has agreed to export nearly 3 million barrels of crude oil per month to China, the statement said.

Petroecuador said that the $1 billion represents about 28% of the total value of the oil that Ecuador has agreed to export to China.

Ecuador produced over 485,000 barrels of oil per day in May.

Ecuador is also negotiating a $1 billion loan with China, Economic Policy Minister Diego Borja said earlier this week.

The deals could help the Ecuadorean government inject liquidity into the economy, after export revenues fell sharply in the first half of the year due to low oil prices, Reuters reported.

The country needs alternative financing after defaulting on some of its sovereign bonds last year, a move that cut the country off from the international capital markets.

Chile's state-run energy company ENAP last week signed off on a deal for 10 million barrels of Petroecuador's oil output per year.