By Libya Herald reporter.
Tunis, 5 May 2015:
Prime Minister Abdullah Thinni discussed the possibility of building two new oil refineries with representatives . . .[restrict]of a foreign company during a meeting held at the Cabinet office in Al-Beida Monday.
At the meeting, Thinni, accompanied by his two Deputy Prime Ministers, the chairman of the NOC and a member of the House of Representatives, discussed arrangements for the establishment of the two oil refineries.
It was revealed that one refinery is to be located in the eastern region of Libya and the other in the southern area of the country.
The refineries would have a capacity of 36,000 bpd (6,000 barrels per day per unit, with each refinery consisting of 6 production units) aimed at covering the oil derivatives needs of those areas.
Prime Minister Thinni was reported to have said to the company representatives that the contract for the project should be clear so as to ensure the rights of both parties in accordance with the relevant domestic and international laws, adding that a deadline for the implementation of the two refineries should be set.
The desire to build two new oil refineries in Libya is driven by growing domestic demand for fuel, with the shortfall currently having to be imported and the desire to save on depleting foreign currency needed to finance these fuel imports, the government reported.
Moreover, politically and from a decentralization point of view, there is a desire to provide each of the other two of Libya’s three regions with its own independent local source of refined fuel.
The government report on the meeting did not reveal any further details of the proposal such as whether a tender will be put out by the NOC for the proposed refineries.
The idea of Libya building two new oil refineries is not a new one. Libya Herald had reported in October 2013 the then Prime Minister Ali Zeidan announcing his government’s decision to build two new oil refineries.
Zeidan had at the time stressed that these refineries would be to produce for local consumption.
It will also be recalled that during an oil conference held in Tripoli in September 2013, it had been proposed by a number of experts that Libya did indeed need to develop its downstream industry such as developing oil refineries.
This, it had been argued, was one of the easiest means of diversification of incomes and reducing the cost of imports such as refined fuel products.
On the one hand, the argued had been made at the oil conference that Libya needed to develop its downstream capacity in order to take advantage of its natural local advantages, and that any refinery Libya does develop should be “world class”.
The 2013 announcement by Ali Zeidan that the Ubari refinery would only have a capacity of 50,000 barrels had been at odds with advice given at the oil conference that refineries needed to be of a capacity of at least 300,000 bpd to make them commercially competitive. [/restrict]