May 15, 2012 / 5:14 PM / 5 years ago

Qatar to proceed with $2 bln refinery in Tunisia

Tema oil refinery near Ghana's capital Accra March 28, 2005.Yaw Bibini

TUNIS (Reuters) - Qatar has revived plans to build a $2 billion oil refinery in Tunisia after years of delays, Qatari and Tunisian officials said on Tuesday, potentially expanding the North African country's refining capacity more than four fold.

Qatar Petroleum initially won a bid in 2007 to develop Tunisia's first privately built, owned and run refinery as part of a joint venture with Britain's Petrofac, but the project never got off the ground.

Keen to bolster relations in the aftermath of the 2011 revolution, which ousted Zine al-Abidine Ben Ali and ushered in an Islamist-led government, Qatar recently agreed to lend Tunisia $500 million at favourable rates.

The Gulf Arab gas exporter has also revived talks with Tunisia, a net hydrocarbons importer whose economy has suffered in the aftermath of last year's unrest, over the refinery to be located in Skhira, 60 km from the southeastern city of Sfax.

"Qatar will implement the Skhira refinery project," Qatari Minister of State for International Cooperation Khalid Mohamed al-Attiyah told reporters in Tunisia.

Attiyah said the cost of the project was "very large" and it may require another partner, but declined to give more details.

A Tunisian government official put the cost of the new refinery at $2 billion, adding that it would have an initial capacity of 120,000 barrels per day, building eventually to 250,000 barrels a day.

The Skhira refinery will be Tunisia's second after the state-owned facility at Bizerte, which has a much smaller capacity of about 34,000 barrels per day.

It is expected to reduce Tunisia's reliance on fuel imports, which have risen in price in recent years, straining the country's budget, and could eventually allow Tunisia to export refined fuel.

The refinery will include processing units, storage, and offices. It will provide up to 1,200 jobs.

It was not clear when work would begin or when the refinery would come online.

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