Morocco may host a $3 billion to $4 billion plant to refine and export crude oil, developed by companies from the UAE, the head of Moroccan refining firm Samir said on Tuesday.
"There is a talk … about some Emirati companies studying the option of having an export refinery at (Moroccan Atlantic port) Jorf Lasfar," Samir General Manager Jamal Ba Amer said at a presentation at the company’s headquarters.
"It is at an early study stage… It would take a massive investment to make a new grass-roots refinery nowadays – we’re talking about $3 billion to $4 billion."
He did not name the firms that might be involved or say whether Samir, Morocco’s sole refiner, might take part in such a project.
Ba Amer played down the prospect of Samir building a new refinery itself, pointing out that Morocco’s domestic fuel market is still relatively small at 8 million tonnes, compared to 50 million for France.
"You can consider seriously building a new one when Morocco is consuming 15 million tonnes," he said.
To meet growing domestic demand, it plans to expand capacity at its existing Mohammedia plant on the Atlantic coast southwest of the capital Rabat.
Samir officials said they expected contracts to be signed in coming months to increase capacity to just over 9 million tonnes per year from 6.25 million tonnes now, a project that would cost under $45 million and would take 24 months to complete.
The plan comes in addition to a sweeping, $850 million modernisation of the Mohammedia plant already under way to add hydrocracking technology and the latest refining processes to improve the quality of its products.
That overhaul was 49 percent complete by the end of April and fully on track, said Ba Amer, an impressive feat given that high oil prices have boosted construction activity worldwide and placed a strain on available equipment and services.
"If we had started six or seven months later, we would have had big delays," said Ba Amer.
Samir says the plant improvements were financed with Moroccan bank loans and bonds. The new refining units are due to come fully online by the end of 2008.
Company officials expect the upgrade to double refining margins from $3-4 per barrel, reducing the risk of a sudden slide in profits when crude prices rise and making Samir more able to fend of competition from imports.