Italian company Technip won a public tender put forward by Alexandria Mineral Oils Company (AMOC) for the preparation of an economic and technical feasibility study for the establishment of two new units for the production of diesel and naphtha and fuel oil at its complex in Alexandria, reported Al-Mal.

The agreement was signed in the presence of the Minister of Petroleum and Mineral Resources Sherif Ismail. AMOC celebrated the signing of the agreement yesterday.

This contract comes within the framework of the ministry’s strategy for the development of production units at refineries to secure the needs of the domestic market for petroleum products.

The Italian company will receive $635,000 in expenses for the study, said Mohammed Al-Sardi, the Director of Financial Management and Investor Relations at AMOC, in exclusive statements made to al-Mal newspaper.

He explained that the Italian company had submitted the best financial and technical offer, which allowed it to win the tender after fierce competition with a number of international and local companies.

The duration of the feasibility study is 11 months, in four stages, covering diverse aspects such as economic and technical feasibility and marketability. Following the completion of the study construction is likely to start during the last quarter of next year, he added.

It is likely that the investment cost of the expansions could reach $ 250m, he went on to say.

He hinted that AMOC will depend on bank funds to provide the bulk of the new expansion investments, while the company will relying on its own liquidity as much as possible, although he had indicated that all financial details are still subject to the final feasibility studies.

An AMOC statement released the previous day had also said that the company was targeting local market demands through this project, chief among them diesel and naphta, expanding capacity by 130,000 and 60,000 tons per year respectively.

Mohammed Al-Sardi added that project also aims to maintain production figures for blended diesel at approximately 700,000 tons per year.