Kuwaiti conglomerate Noor Financial Investment plans to assemble an international consortium to build a $1.7 billion oil refinery in Syria, a senior executive said on Wednesday.
The 140,000 barrels per day project, would be vital to Syria as it struggles to cope with a multibillion dollar fuel import bill. Noor recently entered the once closed Syrian market and was awarded a licence to open a bank with $200 million capital, as well as an insurance company.
“The target for the consortium is to take off in the middle of next year. The feasibility study is under way and the design, technical, financial and legal details are being worked on,” Omar Samara told Reuters.
“The Syrian government will guarantee crude oil supply and purchase of the refined product, which lessens the risk greatly. We have already received a lot of Arab and foreign interest to join the consortium,” said Samara, a Jordanian national in charge of Noor’s operations in Syria.
Samara said the project would require forming a consortium with a capital of around $500 million for the refinery in Deir al-Zor in eastern Syria, site of another refinery project being negotiated between Syria and China.
With steeply rising fuel import bills, Syria has intensified its efforts in recent months to attract international investors to help it refine more of its own crude. Refinery projects have been on the drawing board for years.
Deputy Prime Minister Abdallah al-Dardari told Reuters this week Syria plans to refine all of the 400,000 bpd it produces by 2010. Exports now run at around 200,000 bpd.
Syria’s two refineries have a capacity of 240,000 bpd but meet around half of the country’s demand for gas oil, which is expected to reach 7.7 million tonnes this year.
Noor signed a memorandum of understanding with Syria two months ago to study building the refinery.
Samara said the Baath-led government, which still controls large swathes of the economy despite limited moves toward economic openness in recent years, was showing seriousness about completing the refinery project.
“The cooperation we have had from the government is excellent and proceeding with construction of the refinery depends on its continuation,” he said. “The studies will take some time. A project of this size needs to be leveraged financially.”
Samara said although Noor has not been involved in oil refining, it will attract the necessary expertise for the Syrian venture. “It is normal these days for financial companies to lead a technical alliance,” he said.
Noor is linked to Kuwait’s National Industries Group, which includes among its shareholders the Khurafis, a leading Kuwaiti business family already with investments in Syria, including real estate and Costa coffee shops.
Syria’s economy underwent heavy nationalisation when the ruling Baath Party took power in 1963 and imposed emergency law, which remains in effect today.
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