Qatar acquisition could boost refining capacity more than four fold

Qatar Petroleum is set to build a plant in Tunisia that has the potential to expand their refining capacity more than four fold.

The North African company has revived plans for the $2 billion (£1.2 billion) oil refinery in Tunisia after delays had cast the acquisition into doubt. But Qatari and Tunisian officials said on Tuesday that the purchase is set to be closed, which could expand the company's refining capacity significantly.

First bids for the refinery started in 2007, but failed to get off the ground. The initial bid was part of a joint venture with Britain's Petrofac, which would give the petroleum companies permission to develop Tunisia's first privately built, owned and run refinery.

But there was a change in tide after the 2011 revolution, and the Qatari petroleum company moved swiftly to bolster relations in the country. After
Zine al-Abidine Ben Ali was ushered out and an Islamist-led government took control in the country, relationships were solidified with an agreed loan from Qatar to the sum of $500 million at favourable rates.

Qatar Petroleum revived the talks to build a refinery in Skhira, which is 60 km from the southeastern city of Sfax. The Tunisian economy has suffered considerably since the political upheaval, and the investment will be seen as a much needed boost.

"Qatar will implement the Skhira refinery project," Qatari minister of state for international cooperation Khalid Mohamed Al-Attiyah told reporters in Tunisia. He added that another partner may be needed on the project to cover the large costs associated with it, but declined to comment further on who this is likely to be.

According to the Tunisian government, the refinery would have an initial capacity of 120,000 barrels per day, which would gradually increase to 250,000 barrels a day. The only other refinery in the country is the state-owned facility at Bizerte, which produces a much smaller capacity of around 34,000 barrels per day.