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Syria plans $3b refinery

SHARM EL SHEIKH — Syria plans to build a $3 billion oil refinery with a Kuwaiti partner, part of an effort to more than double the country’s capacity and process crude oil from neighbouring Iraq, Syrian Oil Minister Sufian Al Alao said.

Noor Financial Investment, a Kuwait-based investment firm, will announce on Nov. 5 the creation of a company to build the plant in the eastern Syrian province of Deir Ezzor, the second new Syrian refinery announced in a week. The country wants to reduce imports of oil products such as gasoil, Al Alao said yesterday in an interview in Egypt’s Red Sea resort of Sharm El Sheikh.

The new refineries will eventually allow Syria to import, process and export Iraqi crude, offsetting its own declining supply. Iraq’s oil exports through Syria, which had contravened United Nations sanctions, stopped in 2003 after the U.S.-led invasion of Iraq.

Noor and Syrian partners will offer shares in the company to the public and to Syrian expatriates, the minister said.

State companies from Venezuela, Iran and Syria and a Malaysian private company announced plans this week to build a refinery near Homs, in central Syria. The $2.6 billion plant, to be completed in four years, will process crude oil from Venezuela, Iran and Syria, Al Alao said.

Middle Eastern nations, including Saudi Arabia, the world’s top oil producer, have announced plans to add refining capacity as a global shortage of such plants contributes to surging fuel prices. Crude oil reached a record $94.46 a barrel yesterday in New York.

New refineries, upgrades

The two new Syrian refineries will each have a capacity of about 140,000 barrels a day, he said. Syria’s refining capacity now stands at 220,000 barrels a day, split about equally between a plant in Homs, and another in the port city of Banias. The government has also allocated $1 billion to upgrade the Banias refinery, Al Alao said.

Syria’s crude production will fall to 360,000 barrels a day next year from 380,000 barrels a day this year, Al Alao predicted. Syrian oil production peaked at 600,000 barrels a day in 1996, according to BP Plc’s Statistical Review of World Energy.

Syria is now importing about 60,000 to 70,000 barrels a day of gasoil, a fuel used for heating and transportation that accounts for half its consumption of refined products.

The government yesterday began implementing a decision to reduce subsidies on gasoline in an effort to cut government spending costs and curb smuggling to neighbouring countries, the state-run newspaper Ath-Thawra reported. Fuel subsidies cost the government 350 billion Syrian pounds ($6.8 billion), or 65 per cent of its budget, the newspaper said.