Total in refinery talks with Damascus

16 December 2005
France's Totalis in preliminary talks with the Petroleum & Mineral Resources Ministry about building an estimated $1,000 million grassroots oil refinery and a joint exploration and development project with Syrian Petroleum Company (SPC), Syrian deputy prime minister for economic affairs Abdullah Dardari told MEED on 2 December.

'There are discussions about a possible investment by Total in setting up a refinery [with capacity] of 70,000 barrels a day [b/d] on a build-operate-transfer [BOT] basis. There are two main locations - east of Homs; or Deir al-Zor - and we are now looking at the technical and economic feasibility of those two locations,' Dardari said.

The project is one in a series of potential grassroots refineries the ministry is considering for Deir al-Zor.

China National Petroleum Corporation (CNPC)has signed a memorandum of understanding (MoU) with the ministry to build an estimated $1,000 million refinery with capacity of 70,000 b/d, on a BOT basis (MEED 2:12:05).

Russia's Stroytransgaz Oilis negotiating with the ministry to build an estimated $2,000 million integrated refinery and petrochemicals complex with capacity of 140,000 b/d. 'This is under investment law 10 and is not a government contract,' Dardari said. 'They will gain considerable tax and customs exemptions and, most importantly, they benefit from the important geographical position of Syria as an exporter of oil products.'

The government also plans to build an estimated $1,500 million refinery with capacity of 140,000 b/d, for which France's Beicip Franlabcarried out the front-end engineering and design (FEED) package (MEED 4:3:05). But this project may no longer be considered necessary. 'If we have all these other projects - [with] CNPC, Total, Stroytransgaz - we may not need it,' said Dardari.

With Damascus set to become a net importer of crude oil by 2020 it is reconfiguring its oil and gas sector. 'The world today is not facing a crude oil shortage - it's facing a refinery capacity shortage. And Syria is nicely located on the Mediterranean and in the Middle East to be an excellent place for bringing crude oil, refining it and then re-exporting oil products across the world,' he said.

Dardari said part of the government's refining strategy involved closing the Homs refinery and upgrading the Banias facility. 'The Homs refinery is old and environmentally it is causing disasters, so we are seeking a day when we can close the refinery and have better, more efficient and less polluting refineries,' he said.

Dardari said that Banias refinery's location on the coast made it a strategic choice for the government, although a decision on financing has still not been made. 'We are serious about the rehabilitation of Banias. It's on the sea and we are not planning to build new refineries on the Mediterranean coast for environmental reasons. There might be a prospect when Banias only refines imported oil - that's one of the ideas.'

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