New private refinery planned in Yemen

SANAA, May 23 (Reuters) Yemeni and Saudi investors plan to build a 45,000 barrel-per-day (bpd) refinery in Yemen, the state news agency Saba reported on Tuesday.

The agency said a deal was signed with Indian firm Furnace Fabrica India Ltd on Monday to build the refinery in Ras Issa in Hodeidah on the Red Sea coast. The project will be owned by a company set up by the Yemeni and Saudi investors.

''The first phase, which is expected to cost 0 million, will involve production of diesel, furnace oil, LPG, kerosene and naphtha. It will be completed by June 2007,'' an official from Furnace Fabrica told Reuters on Tuesday.

''Construction work started today.'' He said a second stage to expand the refinery could involve an additional investment of 0 million.

Another private Yemeni firm plans to build a 60,000 bpd refinery in Ras Issa. The 0 million refinery, to be 50 percent owned by HoodOil Ltd and 25 percent by India's Reliance Industries, is due to start up by the third quarter of 2007.

Ras Issa is home to a terminal which handles exports of crude oil pumped by pipeline from the Marib oilfield.

REUTERS CS DS1643