Decision pending on Azzawiya

26 September 2003
A decision is expected in October over the future of the long-delayed project to upgrade the country's second-largest refinery at Azzawiya. The client, Azzawiya Refinery Company (ARC), is understood to be considering several options for the implementation of the project after South Korea's LG Engineering & Construction Company terminated a $270 million revamp contract in April (MEED 16:5:03).

ARC, an affiliate of the National Oil Corporation, faces a number of choices on how to proceed with the proposed upgrade of the 120,000-barrel-a-day refinery, ranging from issuing a tender for the original revamp contract to directly negotiating with one of the previous bidders.

Under the terms of the engineering, procurement and construction (EPC) contract signed in May 2002, LG was to have installed a new continuous catalytic reformer unit, naphtha and gas/oil hydrotreaters, and an isomerisation unit. However, delays in the project led LG to cancel the contract earlier this year.

A proposed second-phase expansion included a new residual catalytic cracker unit, methyl tertiary butyl ether (MTBE) facilities and an additional sulphur treatment plant. Milan-based Foster Wheeler Italiana, the longstanding project management consultant for ARC, is now understood to be studying the feasibility of tendering the two packages together, rather than independently, as previously planned.

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