May 2, 2010 / 12:27 PM / 7 years ago

Egypt to build its largest oil refinery: agency

<p>Framed by storage tanks, a chimney discharges vapour at an oil refinery in western Sydney November 25, 2009. REUTERS/Tim Wimborne</p>

CAIRO (Reuters) - Egypt plans to build an oil refinery with Chinese investment worth $2 billion to supply the domestic market as well as export to China, the state news agency MENA reported on Sunday.

The refinery will be Egypt’s largest, with output capacity of 15 million tonnes per year, it said. A further 15 million tonne expansion will be added to double the refinery’s capacity.

The build-own-operate-transfer project will be constructed by Chinese companies including Rongsheng Petrochemical Co. and state-owned China National Petroleum Corp (CNPC), China’s largest oil and gas firm.

The Chinese firms will operate the refinery for 25 years and then gradually transfer ownership to Egypt.

China will likely add 2.84 million barrels per day of new refining capacity between 2010 and 2015, industry officials and Chinese media have said, in a new refinery building boom to fuel its robust economic growth.

The expansion pace, some 475,000 bpd on an annual average, does not look huge compared with China’s annual incremental oil demand growth, but some market analysts have argued that China may already be in a structural surplus of gasoline and diesel.

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