Repsol to spend EUR 3.2 billion on Cartagena plant upgrade
Refinery expansion largest Spanish industrial project ever.9 January 2008
MADRID - Spain's largest oil company Repsol YPF said Tuesday it plans to spend EUR 3.2 billion on an upgrade to its refinery in the southern Spanish city of Cartagena, in what it said will be the largest industrial investment ever made in the country.
With crude prices near record highs, and refining capacity stretched worldwide, the investment figure approved by Repsol's board is more than the EUR 2.1 billion it said it would spend on the project in July of last year.
The upgrade will more than double the refinery's capacity to 220,000 barrels a day when it is completed in 2011. Construction work will involve 6,000 workers, while the refinery will eventually employ 700 more people.
Repsol will build 30 new processing units at the existing plant including hydrocracking, distillation and coking facilities.
"When the new units are on stream, the Cartagena refinery will become one of the most modern in the world and with one of the biggest capacities," Repsol said in a statement.
More than 50 percent of the increased output will go to fuels for transport, particularly diesel, of which there is a shortage in Spain.
"The economic and industrial magnitudes of the project make it the biggest industrial investment ever undertaken in Spain," the statement said.
In a separate development, Argentina, where Repsol's local unit YPF is the leading operator, has called a temporary halt to the export of fuels such as gasoline and diesel to relieve shortages in the South American country.
Repsol said it was willing to work with the government to help resolve the problem. A Repsol spokesman noted that 90 percent of the output from the company's Argentine wells goes to the domestic market.
The government measure will remain in place until supply is back to normal and prices have stabilised. In November of last year, Argentina increased the levy on exports of gasoline from 5 percent to 35 percent and on crude from 45 percent to 60 percent.
Repsol is selling up to 25 percent of YPF to the Argentine group Eskenazi as a prior step to floating an additional 20 percent of the company in the Buenos Aires stock exchange.
[Copyright EL PAÍS / Adrián Soto 2008]
Subject: Spanish news