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Quality Energy Holding plans $13b oil refinery

The 500,000 barrel-a-day refinery will be a joint venture with the government of Russia's Chelyabinsk region, in which Quality Energy plans to invest $100 billion between now and 2012, said Adil Al Otaiba.

"The Chelyabinsk government is negotiating with the Iranian government to provide the crude for the UAE refinery," he said in an interview in his Dubai office yesterday.

Quality Energy is in talks with the Rulers of one of the UAE's northern emirates about building the plant, he said, without giving a date for the start of construction.

Quality Energy will begin construction on a $4.5 billion refinery in Chelyabinsk in 2009, once the Chelyabinsk government has concluded talks with oil companies such as Itera Holding Ltd., Rosneft Oil Co., and OAO Lukoil to secure 1 million tonnes a year of crude.

"The Russian government will guarantee crude supplies to the refinery for 15 years,'' Al Otaiba said.

Quality plans to invest $100 billion in Russia's Chelyabinsk region in infrastructure and energy-related projects, including refineries and power plants, said Al Otaiba, whose family has close links with the Russian region's government.