LIBYA - The Local Refineries.

There are five oil refineries in Libya with a total topping capacity of 348,000 b/d. NOC owns these refineries and operates them through its subsidiaries. In the late 1980s, it had plans to raise the total capacity to more than 620,000 b/d by the mid-1990s. One project then under consideration was a 200,000 b/d export refinery at Misurata. But the planners have since changed their minds. Now there is talk of a new refinery at Mellita which is estimated to cost about $8 bn.

For years NOC has been reviewing options to build a new refinery in the south-west of the country. The project is part of a larger plan aimed at bringing on board JV partners to support NOC's efforts to upgrade and expand its refineries.

Another new refinery has been proposed to be built at Sebha, about 700 km south of Tripoli and close to al-Wafa' gas and Murzuq oilfields - the latter producing light/sweet crude. Amari Dkhakhni, petrochemical department manager at NOC, was in March 2005 quoted by MEED as saying: "Because of the sheer distances across Libya and the increasing transportation cost, NOC is studying the possibility of building a hydroskimming refinery to meet the local demand in the south-west".

The plant was then estimated to cost $150m and was proposed to have a capacity of 20,000 b/d to produce LPG, gasoline, kerosine, diesel and heavy fuel oil. MEED said an un-named European company was co-operating with NOC on the study for the refinery. But now the costs are much higher, which force NOC executive to keep hesitating.

For years, the az-Zawiya refinery has been in urgent need of upgrading because most of its products are of low quality. An upgrade and expansion project was tendered in 2000. Bids by shortlisted contractors were opened by NOC on Feb. 4, 2001. Technip-Coflexip of France made the lowest bid at about $250m and was awarded a letter of intent for an EPC contract. But later NOC changed its mind and re-tendered the project.

LG Engineering of South Korea was contracted at $280m in May 2002. But, after disagreements and delays caused by NOC, LG withdrew from the project in May 2003. That move put on hold a $3.5 bn programme.

NOC executives have said the main objective in the expansion projects is to shift the output of the refineries in favour of high quality fuels, not only to improve the environment in Libya but also to meet new EU fuel specifications. Now high sulphur fuel oil accounts for almost 50% of the plants' actual output.

Az-Zawiya refinery, located in the north-west of the country, came on stream in 1974 with a capacity of 60,000 b/d. Built by Snamprogetti of Italy, its capacity was raised to 108,000 b/d in 1977. But the plant can run at the rate of 120,000 b/d of crude oil.

This plant has a unit to produce 30,000 t/y of lubricants for the local market. Its output meets most of the demand in Tripoli and nearby areas. Part of its production of jet fuel, gasoil and naphtha is for export. It processes heavy Syrian crude oil, known as Suwaidiyah Blend, with some of the products shipped to Syria. It has also processed light/sweet crude oil from al-Sharara field in the Murzuk Basin produced by Repsol/YPF (see Gas Market Trends).

NOC has been in negotiations with Uhde since the start of 2004 but until now there has been no agreement. As was initially conceived a few years ago, the first-phase contract called for installation of a new continuous catalytic reformer (CCR) unit, naphtha and gas/oil hydrotreaters and an isomerisation unit. The phase 2 expansion called for a new residual catalytic cracker unit, MTBE facilities and a sulphur treatment plant.

A $15m 55,000 t/y LPG recovery unit at the plant had been built at the refinery. Tecnimont of Italy was in charge of detailed engineering design for the LPG unit and provided procurement services as well as supervising the building work. John Brown Engineering of Britain worked with NOC's London affiliate Teknica on a maintenance project at this refinery.

The refinery and its sea-water desalination unit were upgraded in 1991, under a $30m contract signed in July 1988, by Rendel Palmer & Tritton of Britain and its engineering subsidiary High Point Rendel. The topping unit was upgraded in the subsequent years. ARC also had a new cracking facility built in 1996. One of the desalination units at the plant was upgraded further subsequently.

A $150m oil terminal, built at az-Zawiya's port, consists of two berths - one able to accommodate a 50,000 dwt tanker and the other for tankers of up to 3,000 dwt.

The Ras Lanuf refinery, dedicated for exports and completed in early 1984 with start-up operations delayed until the first half of 1985, is the biggest in the country with a capacity of 220,000 b/d. Operations were delayed to 1985 as the topping plant's products did not match market needs. NOC's unit in charge, the Ras Lanuf Oil and Gas Processing Co. (Rasco), could not find term buyers.

Ras Lanuf processes Sarir, Messla and other crude oils. An important part of its output is supplied to power plants on the Mediterranean coast. Another part is supplied as feedstocks to nearby petrochemical plants.

The Tobruk refinery, of the Arabian Gulf Oil Co. (Agoco), came on stream towards the end of 1985. A year later NOC decided to double its 24,000 b/d capacity. In November 1989, CTIP won the design and engineering contract for the expansion. Energoinvest got the contract for related building work. Processes were licenced in mid-2000 from IFP for naphtha hydrotreatment, light paraffin isomerisation, de-isohexanizer recycling, and a catalytic reforming benzene elimination unit. They went on steam in 2006. The plant processes Sarir crude oil.

The Sarir topping plant, 400 km south of Marsa Al-Brega, came on stream in 1986. This plant is also operated by Agoco (see OMT).

The petrochemical sector in Libya has faced a relatively stagnant situation for years. Several projects which were proposed, including export ventures, have failed to get off the ground. Planned expansions at the petrochemical complexes, mainly the ones at Marsa el-Brega and Ras Lanuf, have been affected by financial constraints, a slump in the global petrochemical business in the early 1990s, and by the political situation facing Libya through the 1990s and in recent years. A planned second fertiliser complex in Sirte was postponed.

NOC has been trying to attract foreign companies since the early 1990s to set up petrochemical JVs geared for export. But it has had no success. Libya's local upstream and overseas downstream partners had no enthusiasm for ventures in the petrochemical sector.

Chempetrol International, based in Malta, markets about 25,000 tons/month of Libyan-produced methanol, urea, ammonia, caustic soda, PVC and olefins in Europe. Set up as a 50-50 JV in 1986 between the Libyan Arab Foreign Investment Corp. (Lafico) and Attilio Carmagnani, an Italian firm trading in petrochemicals and other products, Oilinvest took full control of Chempetrol in 1988.

Ras Lanuf, the main industrial zone in Libya, is the site of the biggest petrochemical and refining plants in the country. A first-phase complex consisting of three units went on stream in April 1987 (more than six months behind schedule, with NOC's subsidiary Rasco then facing problems which ranged from poor performance by some contractors to delays in Libyan funding). Brown & Root of the US was the main technical consultant and a variety of foreign contractors were involved in engineering and construction work (see down2LibRefJul11-05).