Oil Report

Syria signs international deal to build refinery

DAMASCUS, Oct 31 (Reuters) - The Syrian government has signed an agreement with Iran, Venezuela and a Malaysian conglomerate to build a 140,000-barrel per day refinery in central Syria, the official news agency said on Wednesday.

Production is expected to start in 2011, helping to lessen Syria’s reliance on imported fuel. Numerous plans for new refineries in Syria have hit delay and did not materialise.

The $2.6 billion deal follows the strengthening of political ties between the Damascus government, which is under U.S. sanctions, and the three countries.

The Syrian news agency said Venezuela and Iran will help supply the refinery with crude oil. It did not say what role the Bukhary group, one of Malaysia’s largest businesses, will play in the project.

The refinery will be located 180 km (112 miles) in the al Faraqlus area northeast of Damascus, near an old oil pipeline linking Iraq to Syria’s Mediterranean coast.

Syrian crude oil production, currently running around 380,000 bpd, has been steadily declining over the past 10 years. Syria’s two refineries have a capacity of 240,000 bpd but meet only half of the country’s demand for gas oil.