Chinese Backed $1 Billion Refinery Part of Syria’s No Crude Export Strategy

---

Researched by Industrial Info Resources (Sugar Land, Texas). Syria and China are in discussions on a joint venture to build a 70,000 barrels per day (BPD) refinery for Syrian heavy crude at the oil complex of Deir Al Zor in the east of Syria. Finance for the project would come from China’s state owned oil company, China National Petroleum Corp (CNPC). Sufian Allaway, Syria’s oil minister said that a deal would be signed after the completion of a feasibility study. Construction is expected to start in 2008 and be completed in 2010. A decision will be made on whether to operate the $1 billion project on a BOT (build+operate+transfer) basis or as a joint stock company with the Syrian state taking a minority stake.

Currently Syria has a negative fuel balance spending more on fuel imports than the revenue, which accrues from exporting 200,000 bpd of crude oil. Government strategy is to bring crude exports to a stop over three years and process all oil produced in Syria at domestic refineries.

Oil field cooperation is a crucial part of trade ties between Syria and China. Following the imposition of US sanctions in 2004 the country has been boosting ties with China and is looking to import Chinese technology to increase production at its oilfields. International majors including Total and Shell operate in the country but priority focus has been given to Chinese, Russian and Indian companies. At the end of 2005 CNPC and India’s ONGC (Oil and Natural Gas Corp) together invested $580 million in the oil sector. Now Syria is inviting Chinese companies to explore offshore oil fields with an area of 3,200 square kilometers. Another 140,000 bpd refinery at Deir Al Zor is under study by the Kuwaiti group, Noor Financial. Syria, Iran and Venezuela have agreed to construct a 140,000 bpd refinery at Homs. Currently the country is producing 400,000 bpd of oil split equally between light and heavy.

Phase III of the Arab Gas Pipeline is due for completion by the end of Q3. This 324-kilometer section will run from Jordan’s Rihab power station to Homs. The next two Syrian sections will stretch 230 kilometers to Turkey to deliver Egyptian gas to Europe. Talks are taking place between the three countries on finance for this section. The 600-kilometer pipeline has a 10 billion cubic meters per annum capacity. At Homs the pipeline will split going northwest to the Mediterranean and west to the Zahrani refinery in Lebanon. Eventually it is planned to extend the pipeline undersea to Cyprus. Currently Syrian gas production is being used to meet domestic demand of 12 million cubic meters a day including power generation feeds.

View Project Report - 98100015

Industrial Info Resources (IIR) provides marketing communication services ranging from industrial database solutions to market forecasting, custom analytics, and specialty promotions that support high-level image campaigns.