The project to rehabilitate and expand the 120,000-barrel-a-day (b/d) refinery has been subject to long delays and much debate since it was first tendered at the start of 2001. Paris-based Technip-Coflexipinitially emerged as the low bidder and was awarded a letter of intent for the engineering, procurement and construction (EPC) contract, valued at around $250 million.

However, ARC then retendered the project, opening the way for LG to be awarded the contract in May 2002 (MEED 31:5:02). The estimated 30-month project was to involve the installation of a new continuous catalytic reformer unit, naphtha and gas/oil hydrotreaters, an isomerisation unit, sulphur and amine units, tankage and a 5,000-cubic-metre-a-day desalination plant. The upgrade was scheduled for completion in late 2004 and France's IFPis the technology licensor.

LG's withdrawal from the Azzawiya upgrade now puts on hold the project, which is part of a $3,500 million programme to expand and upgrade refining infrastructure. 'It is uncertain whether Azzawiya will go ahead at all now,' says a source close to the project. 'The Libyans have a fairly flexible approach and they may ultimately decide that it is preferable to expand one of the other refineries instead, such as Tobruk or Ras Lanuf.'