Costs derail Petronas' planned 100,000 b/d Sudan refinery

Eric Watkins
Senior Correspondent

LOS ANGELES, June 12 -- Malaysia's Petronas has deferred plans for its 100,000 b/d refinery project in Sudan due to rising costs, according to a senior company official.

The Sudanese government had awarded Petronas a contract to build the refinery at Port Sudan on the Red Sea in 2005, with output from the refinery to be exported. The refinery, which would be jointly owned 50:50 by Sudan and Petronas, was due to come on stream in 2009 (OGJ, Sept. 12, 2005).

However the cost of the refinery has soared to $5 billion from the originally estimated $2 billion.

"We cannot justify its commercial viability because of the very high investment cost," said Petronas Pres. and Chief Executive Officer Tan Sri Mohd Hassan Marican. "We have to put it aside for now," he said.

Contact Eric Watkins at hippalus@yahoo.com.

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