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Fri 4 May 2007 02:47 PM

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Fujairah sells state-owned oil refinery

Furairah government is selling a majority stake in a mothballed refinery to Swiss-based Vitol.

The government of Fujairah in the United Arab Emirates has sold "most of the stakes" in its refinery to Swiss-based oil trader Vitol, a statement on the state news agency WAM said on Friday.

The 82,000 barrels per day refinery has been mothballed but a government official said last month it could be restarted once it was sold.

"The deal was signed on Thursday night during a meeting between the ruler of Fujairah, Sheikh Hamad bin Mohammed al-Sharqi, and Mr. Ian Taylor, president of Vitol Group," WAM said.

The statement did not give a value for the sale.

The plant has been shut since March 2003 due to poor refinery margins. Production had previously been interrupted from 1998 to 2000 after the plant's former owner, Metro Oil Corp, went bankrupt.

Fujairah, on the Gulf of Oman just outside the shipping chokepoint of the Strait of Hormuz, is one of the world's largest ship refuelling centres. Around 20 percent of global daily crude supply passes through the Strait.

The UAE is planning to build a large new refinery in Fujairah, with capacity of around 500,000 bpd.

It is also planning to build a 1.5 million bpd pipeline that will allow the UAE to export more than half of its crude exports from Fujairah, by-passing the Strait.

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