October 23, 2008 / 1:39 PM / in 11 years

Libya, Foster Wheeler sign refinery deal

TRIPOLI, Oct 23 (Reuters) - Libya signed an agreement on Thursday with engineering and construction company Foster Wheeler Ltd FWLT.O to manage the building of a 200,000 barrel per day (bpd) refinery in western Libya, officials said.

Construction of the Zuwara unit in the Mellita region should be completed in three to five years’ time, the officials said at a signing ceremony in the Libyan capital.

On the Libyan side the agreement was signed by refining company Zorco and oil marketer Oilibya, owned by Libyan holding company Libyan African Investment Portfolio (LAP), supervised by state sovereign wealth fund Libyan Investment Authority.

Francesco Lo Tito, a senior vice-president at Foster Wheeler’s engineering and construction group, told Reuters the unit would be an ultra-modern low sulphur refinery producing 200,000 bpd of refined products.

He gave what he described as a ballpark figure of $4 billion for the investment for the entire project.

The new installation would take Libya’s domestic refinery capacity to about 580,000 bpd.

Libya refines about 380,000 bpd of crude in its Libyan refineries. About 60 percent of the products are exported, with Europe the principal destination.

“The refinery will enhance the middle distillates, giving it a certain added value and reducing the amount of fuel oil,” Lo Tito said.

“I believe this is going to be an export refinery serving a certain area. We are going to be producing a good amount of diesel as the car industry requires this sort of product, but also some gasoline as part of the product will be exported in north Africa.” (Reporting by Tom Pfeiffer, editing by William Maclean and James Jukwey)

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