Libya’s National Oil Corporation subsidiary, Zallaf Oil and Gas Exploration, Production and Refining Company, has officially launched construction activities on the Southern Refinery near Ubari in the Fezzan region. According to the NOC, geotechnical and geophysical works are now underway, marking the beginning of the project’s on-site implementation.
The refinery is designed to process 30,000 barrels per day of crude oil into gasoline, diesel, jet fuel, fuel oil, propane and butane. With an estimated cost of $500 million to $600 million, the Southern Refinery represents a cornerstone of Libya’s strategy to expand domestic refining capacity, reduce reliance on imported fuel and stimulate local industry and employment in the country’s south.
According to Zallaf, basic engineering and procurement works have been completed, with contracts signed earlier this year for the supply of major refining units. The company has partnered with Honeywell-UOP, which is responsible for the initial engineering works for the refining units. Preparatory work on site includes a headquarters, residential camp and operational facilities, including a drilled water well and three-kilometer access road. Pipeline inspections have also been conducted to support fuel supply to the Ubari power station and the refinery.
The Southern Refinery forms part of Libya’s broader effort to revitalize its downstream sector, currently characterized by aging infrastructure and uneven distribution of refining capacity. While Libya’s total nameplate refining capacity is around 380,000 barrels per day, actual output remains below that figure due to maintenance and operational constraints. Existing refineries are concentrated in the north, including Zawiya at 120,000 barrels per day, Ras Lanuf at 220,000 barrels per day and Tobruk at 20,000 barrels per day, leaving southern regions heavily dependent on fuel deliveries from the coast.
By relocating refining capacity to the Fezzan region, the Southern Refinery is set to improve fuel availability, reduce transport costs and enhance energy security for southern communities and industries. The facility is also expected to generate local employment opportunities during construction and longer-term operational roles once complete.
Zallaf is already active in southern Libya through the Erawin and Atshan fields. These operations, along with cooperation with Akakus Oil Operations managing El Sharara and Murzuq fields, are likely to benefit from the refinery by accessing locally refined fuels for field operations. The project aligns with the NOC’s goal of increasing value-added activities, promoting industrialization and expanding local content in Libya’s hydrocarbons sector.
Once operational, the Southern Refinery will support growing domestic demand, strengthen southern development and reinforce Libya’s energy security, demonstrating the NOC’s broader vision to convert hydrocarbon resources into sustainable economic growth.
Source: energycapitalpower.com