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Qatar Revives Plans For 120,000 B/D Tunisian Refinery

Qatar Revives Plans For 120,000 B/D Tunisian Refinery

Qatar has revived plans to build a 120,000 b/d capacity refinery at La Skhira, 60km south of Sfax on Tunisia’s Gulf of Gabes coast, with Libya targeted as a source of crude. The plans, first mooted by Qatar Petroleum in 2007, were long thought dead but were revived by Qatari Minister of State for Foreign Affairs Khalid al-'Attiyah at a meeting with Tunisia’s Minister of Investment and International Cooperation Ridah Bettayib in Tunis on 15 May. Costs are expected to be TD3bn ($1.9bn) according to an economic feasibility study.

“Advanced technical studies” involving QP, Tunisian state counterpart ETAP and Tunisia’s Ministry of Industry will focus on potential crude sources, with Libya the most likely option and Algeria also under consideration. Libya’s Interior Minister Hamadi Jalabi last month told his Tunisian counterpart that Libya was interested in playing a role in the project, in particular in supplying the feedstock, according to Tunisian state news agency TAP . The project will be implemented on a “sound commercial basis,” said Mr 'Attiyah, who added that his Tunisian counterparts were keen to move ahead with the plans.

La Skhira is the site of Tunisia’s main oil export terminal and is connected by pipeline to the country’s key southern fields including Eni’s Adam, the country’s largest producer, as well as being the main export outlet for Algerian Zarzaitine crude via the 24-inch, 265km OT1 pipeline, another potential source of feedstock.The plans would more than quadruple Tunisia’s refining capacity. The country’s only current plant is the simple 35,000 b/d Bizerte plant built in 1963 and operated by ETAP. This covers less than half of the country’s 75,000-80,000 b/d demand for refined products (see page 8). Tunisia currently exports around half its 65,000-70,000 b/d crude production whilst importing 40,000-50,000 b/d (net) of products. Due to the unsophisticated nature of the current plant all of this (on a net basis) comprises light end products: typically 60% or 25,000-28,000 b/d is diesel, 25% LPG and 15% gasoline.

Although Tunisia’s domestic demand is rising this is by nowhere near enough to justify the new capacity (presuming Bizerte remains in service), meaning at least half the output of the new plant will likely be focused on export markets, as was the case with the 2007 plans. If the plans can be expedited there is the potential to capitalize on the lack of gasoline and diesel production capacity from the unsophisticated Libyan refining sector.Tunisia’s Industry Minister Muhammad Lamine Chakhari, in comments reported by TAP in advance of the meeting with his Qatari counterparts, said that the project was slated to “get underway at the end of 2012,” to enter service in 2014 or 2015, and that the initial 120,000 b/d capacity would later be expanded to 250,000 b/d.

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