The upgrade will align the refinery's products with changing fuel demand in the kingdom.

The construction of a new power plant to supply the 125,000 barrel-a-day facility will be completed in September this year, adds the source.

The estimated $600m refinery upgrade involves the installation of a hydrocracker to convert fuel oil to diesel, gasoline and liquefied petroleum gas for sale on the domestic market.

“Fuel oil demand is falling, while that for diesel and gasoline is increasing,” says Rachid Dahbi, a senior executive in the strategy and co-ordination department of the client, local refining company Societe Anonyme Marocaine de l’Industrie du Raffinage.

“[State power company] Office Nationale de l’Electricite (ONE) is switching from fuel oil to coal for electricity generation because it’s cheaper," says Dahbi. "Demand for diesel is increasing because of the growth in numbers of trucks and cars in the kingdom.”

ONE has coal-fired power plants in Mohammedia and Jorf Lasfar, and proposals are being developed for a new facility (MEED 12:10:07).

The engineering, procurement and construction contract is being carried out by a consortium of Snamprogetti - a subsidiary of Italy’s Eni - and Tekfen of Turkey (4:8:06).

The new power plant is being built by Paris-based Litwin. The 40MW plant, which will cost about $40m to build, will generate heat and electricity for the facility.

The turbines, supplied by the US’ General Electric, can be powered by either diesel or natural gas. “When it comes on stream the power plant will use diesel, but it will be converted if we find a source of gas in the future,” says the source.

Plans have been abandoned for a gas pipeline to connect the refinery, located 70 kilometres southwest of Rabat, to the Gazoduc Maghreb Europe pipeline, which exports Algerian gas to Spain via Morocco (MEED 4:8:06). “The preferred solution is for a liquefied natural gas terminal,” says the source.