Zarqa refinery to undergo $500m expansion

04 October 2002

A consortium of the local Atlas Investment Group, Taylor DeJongh and Jacobs International, both of the US, and McCarthy Tetrault of Canada has received a letter of intent for the advisory mandate on the proposed upgrade and expansion of Jordan's only oil refinery, in Zarqa.

A group led by Fieldstoneof the US was originally in line for the mandate, but is understood to have withdrawn its bid following a change of personnel within the company.

Built in the 1960s by Snamprogettiof Italy, the 70,000-barrel-a-day (b/d) refinery is operated by Jordan Petroleum Refinery Company (JPRC)under a concession agreement that expires in 2007. The estimated $500 million project will include upgrading the plant, expanding crude distillation capacity to 150,000 b/d, reducing the sulphur content of petroleum products to 0.005 per cent from 1.5 per cent and installing unleaded gasoline production facilities.

The advisory mandate is divided into three stages: evaluating Jordan's present energy requirements; drawing up and negotiating a new concession agreement; and providing technical and financial advisory services for the expansion of the refinery. An initial feasibility study for the expansion project was prepared byUK-based MW Kellogg Company.

Jordan imports almost all of its crude oil needs from Iraq by tanker trucks under a dispensation from the UN. An agreement signed between Amman and Baghdad in December last year provides for the volume of Iraqi oil exports to be increased by about 10,000 b/d to 110,000 b/d this year. The Energy & Mineral Resources Ministry is studying bids submitted in August for the construction of a new pipeline to bring oil from the Iraqi border to the Zarqa refinery. Contractors say the government is committed to pressing ahead with the $200 million build-own-operate-transfer (BOOT) project, despite the prospect of a US attack on Iraq (MEED 23:8:02).

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