Algeria’s state-owned Sonatrach signed a deal with Vitol Group to send Algerian crude oil to be refined in Italy. The refined petroleum products will then be sent back to Algeria in order to decrease the country’s $2 billion annual fuel imports bill, Bloomberg reported.
Vitol would receive around 2 million barrels per month of Algeria’s light crude oil and would send it back as gasoline and gasoil until the end of 2018, according to Reuters.
Algeria’s Sonatrach chose Vitol from among five firms competing in a tender to ship the country’s crude oil abroad and deliver it back as refine products, Sonatrach’s Head, Abdelmoumen Ould Kaddour, disclosed.
The Algerian state-owned firm plans to pay the processing costs prior to receiving refined fuel, Ould Kaddor said, adding that Sonatrach was in talks over purchasing shares in a foreign refinery, Reuters previously disclosed.