FINAL Libya Report

The Libyan Projects Market 2012A comprehensive overview of project opportunities in the new Libya

A MEED Insight report

http://www.meedinsight.com

2© MEED Insight www.meedinsight.com

CONTENTSContents 2

Preface 4

Executive summary 5

Introduction 7

The Libyan projects market 11

Oil & Gas 17

Introduction and background 17

Major oil fields and transport networks 22

Export, refining and petrochemicals facilities 28

Industry structure and future prospects 35

The status of existing production facilities 40

The future for Libya’s EPSA holders 47

Power 50

Renewables 58

Desalination 63

The Great Man-made River project 67

Wastewater 76

Industry 81

Housing and real estate 86

Social infrastructure 91

Transport 97

Airports 97

Ports 102

Roads 104

Rail 107

TABLES/CHARTS/MAPS

Introduction

Table: Selected members of NTC provisional cabinet

as of 22 November 2011 9

Table: Key economic indicators 10

The Libyan projects market

Table: Contract awards, 2002-10 11

Chart: Contract awards by sector, 2002-10 12

Table: Selected major projects awarded, 2002-10 13

Chart: Top 10 international contractors in Libya

by value of work awarded 14

Chart: Nationalities of the top 10 contractors in Libya

by value of work awarded 14

Chart: Top clients in Libya based on awarded contracts, 2002-10 15

Chart: Budget value of planned projects prior to the conflict 16

Oil & Gas 17

Introduction and background 17

Table: Top 20 oil reserves by country 18

Table: Top 20 oil-producing countries by output 18

Table: Oil production of Opec countries 18

Map: Major oil producing basins 19

Map: Production facilities, pipelines, export facilities,

refineries and petrochemicals plants 20

Major oil fields and transport networks 22

Map: Western Libyan gas project facilities and pipelines 23

Table: Oil fields, locations, producers and capacities 27

Export, refining and petrochemicals facilities 28

Table: Export terminals 32

Table: Refineries 32

Table: Petrochemicals 32

The status of existing production facilities 40

Table: Output and status of major oil and gas facilities 45

The future for Libya’s EPSA holders 47

Table: International firms that have signed EPSAs 47

Table: EPSA contract holders 48

Power 50

Chart: Peak power demand growth 50

Table: Residential power tariffs 51

Table: Non-residential power tariffs 51

Chart: Breakdown of power demand by sector 52

Chart: Installed generating capacity by technology 52

Table: Major power plants 53

Chart: Breakdown of power plant feedstock by type 54

Chart: Gecol’s projected fuel mix 54

Table: Selected power projects under way as of early 2011 55

Chart: Power demand outlook 56

Table: Power plant projects planned by Gecol 56

Renewables 58

Table: Reaol’s renewable energy targets 58

Table: Average wind speeds at five coastal locations 60

Map: Libyan wind map 60

Table: Planned wind farm projects 61

Map: Solar thermal electricity generating potentials 62


3

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© MEED Insight www.meedinsight.com

Desalination 63

Table: Actual operating desalination capacity 64

Map: Major desalination plants in operation 65

Table: New desalination plants under phase 1 65



The Great Man-made River project 67

Chart: Water supply by source 67

Map: The Great Man-made River project 68

Table: The Great Man-made River wellfields 69

Table: Planned reservoirs on the Great Man-made River 69

Map: The Great Man-made River phase 1 network 70




Table: Major construction contracts awarded on the

Great Man-made River project 75

Table: Planned water usage for the first three phases of

the GMR project 75

Wastewater 76

Table: Wastewater treatment plants 77

Map: Major wastewater plants 78

Table: Selected Housing & Infrastructure Board contract awards 79

Industry 81

Table: Existing cement plants 81

Chart: Cement producers by design capacity 82

Table: Local cement producers 82

Table: Licences granted for new cement capacity 83

Table: Libyan Iron & Steel Company facilities 84

Table: Existing steel and cement plants 85

Map: Existing steel and cement plants 85

Housing and real estate 86

Table: The 2001-15 housing plan 87

Table: Key elements of the Housing & Infrastructure

Board programme 87

Table: Selected major housing contracts under construction 88

Table: Selected major real-estate and tourism projects 89

Map: Tourist sites 90

Social infrastructure 91

Table: Mena university investment 91

Table: Selected projects on Odac’s university

and campus building programme 92

Table: Hospitals and health centres 94

Chart: Health investment 95

Table: Projects under construction 96

Transport 97

Airports 97

Map: Main airports 97

Table: Main airports 98

Table: Contract awards on Libyan airport expansion programme 99

Ports 102

Map: Ports 102

Table: Major ports 102

Roads 104

Map: Road network 104

Table: Vehicles in Libya 104

Table: Selected major road projects 105

Rail 107

Map: Planned Tripoli metro 107

Table: Metro line characteristics 108

Table: Metro station locations 108

Table: Metro technical aspects 108

Table: Rail projects 109

Map: Planned rail networks 109

Table: Major contract awards by Railway Executive Board 110

CONTENTS


4www.meedinsight.com© MEED Insight

W ith the highest gross domestic product per capita on the African

continent and the eighth largest oil reserves in the world, Libya has long had excellent projects potential. However, until recently, its projects market was largely moribund, held back by an over-bloated bureaucracy and a lack of central decision-making. As a result, it fell well below its promise.

The fall of the Gaddafi regime and the tran-sition to a new, democratic Libya have transformed attitudes towards the local market. After decades of mismanagement, there is hope that the projects market can start living up to its potential.

For the time being, efforts are being focused on the reconstruction of facilities and infra-structure damaged or destroyed during the

conflict. Initial findings suggest that damage to key infrastructure is not as bad as first believed. With oil and gas output returning close to pre-conflict levels, thoughts are already turning to the future and meeting Libya’s widespread infrastructure needs.

In this latest MEED Insight report, Libya’s projects potential is assessed across all main sectors. The challenges and opportu-nities are analysed, along with the history, policy, targets, projects and key clients. In addition, an assessment is provided on the damage made to certain facilities.

This report is the product of three months’ research and thanks go to everyone who made it possible. It is the latest produced in 2011 by MEED Insight, the bespoke research and analysis arm of MEED.December 2011

Preface

For any questions regarding the contents of this report, please contact Edward James ([email protected]). For more details on MEED Insight publications and its bespoke research services, please phone +971 (0)4 367 1302 or email [email protected]

“Thoughts are already turning to the future and meeting Libya’s widespread infrastructure needs”



The capture and killing of former Libyan leader Muammar Gaddafi

on 20 October 2011 made headlines the world over. And rightly so; after dominat-ing Libya since he took power in a mili-tary coup in 1969, the death of the mercu-rial statesman was an event of significant local, regional and global importance.

But his passing has also brought with it considerable uncertainty over Libya’s future. The capture in late November 2011 of Saif al-Islam, Gaddafi’s most influential son, and security chief Abdul-lah Senussi has drawn a line under the last vestiges of the previous regime, but the National Transitional Council (NTC) has its work cut out as it attempts to bring some semblance of normality back to the country.

There are signs that this is already hap-pening, however. Oil production in many areas is being brought back up to capacity

Executive summary

“Oil production in many areas is being brought back up to capacity surprisingly quickly”

surprisingly quickly, while export facili-ties have been reopened to enable Libyan crude to access the international market. The speed with which this is happening is testament not only to engineering inge-nuity, but also to the fact that Libya’s hydrocarbons infrastructure – much of it in remote areas – has emerged remarka-bly unscathed from the fighting.

It is a similar story in most other sectors. Surveys carried out as part of this report have found that most facilities and projects have experienced relatively little damage as a result of the conflict and that in many existing plants, production is already resuming.

Work on projects that were under con-struction is a separate matter. Interna-tional contractors have yet to return to the country while they wait for the secu-rity situation to improve. However, there is plenty of incentive for them to go back

as most still have performance bonds – in many cases up to 10 per cent of their contract values – with the clients and much of their equipment is also still in the country.

Contractors, spoken to as part of this report, state that advanced parties are re-entering Libya to assess the situation and to gauge the right moment to return. If the situation on the ground rapidly improves, then most of them will be in a position to return by mid-2012.

The interim government has already stated that it will honour legitimate contracts signed under the previous regime, although much depends on the NTC’s definition of ‘legitimate’. Certainly, there are concerns among Chinese and Russian companies in particular, due to their governments’ initial unwilling-ness to support the rebels’ cause and it remains to be seen whether there will



be any lingering animosity towards these firms that could result in them being unable to return.

Whatever happens, the hope amongst contractors is that Libya will become a major projects hub. It is fair to say that under the Gaddafi regime, the Libyan projects market was anaemic at best. Despite oil production of more than 1.5 million barrels a day (b/d) and the African continent’s highest gross domes-tic product (GDP) per capita, the projects market has consistently underperformed. Over the past decade, total annual con-tract awards have never exceeded $8bn and have averaged less than $4bn.

The fault lay primarily with a bloated and inefficient bureaucracy, which had neither the decision-making authority nor the funding approval to proceed with the gov-ernment’s project plans. This is despite Libya having no shortage of funds and the pressing need for capital investment in almost every sector as the country’s aging infrastructure became increasingly unable to serve the fast-growing population.

It was not uncommon for tendering activities and contract award procedures to take years to complete. Projects were frequently cancelled or remained perma-nently in limbo. Often, contracts were awarded only for the successful contrac-tor to discover that funding had not been approved for the project. Despite four oil

figures compare very favourably with the country’s $96bn GDP.

It will take time, however, for spending to accelerate. By definition transitional, the NTC is unlikely to embark on any major capital spending programme. Until an elected government takes over, con-crete developments are not expected to take place and may not occur until 2013 at the earliest.

But the potential is clear. The Libyan projects market is in the optimum posi-tion where there is a pressing need for

projects investment and the finance is available to fund this need. From housing and hospitals to roads and railways, there is considerable underdevelopment of existing infrastructure, which will require substantial investment in the medium to long term. In the short run, the emphasis will be on completing existing schemes and ensuring that the nation’s hydrocar-bons and utilities infrastructure is operat-ing at a sufficient rate.

The private sector, both local and foreign, will have a key role to play in this projects evolution. The Libyan economy has hith-erto been dominated by the public sector. Any new government will be keen to liber-alise the economy and attract urgently-needed foreign investment into the coun-try. As an investment destination, Libya is fertile territory. For example, its proximity to Europe, cheap power and competitive feedstocks make it a prime industrial investment target, while its thousands of kilometres of unspoilt beaches, ancient ruins and good weather should prove attractive to tourism developers.

The emergence of a new Libya offers the prospect of a major new projects market in North Africa. For suppliers, vendors, investors, contractors and subcontractors, it provides a potentially lucrative new market that can offset the increasingly competitive environment in the Gulf. The risks may, for the time being, be relatively high, but so will the potential returns.

and gas licensing rounds, there was little discernible increase in hydrocarbons activity. The downstream sector remained moribund, while international oil firms have been reluctant to invest in upstream production increases.

With the demise of the Gaddafi regime, the hope is that the new government will be more efficient in its capital spending programme. It certainly has the cash to do so. Libya had foreign exchange reserves of close to $170bn as of late 2010, according to the International Monetary Fund, while its foreign assets totalled $152bn. Both



HistoryLibya is a predominantly Arab state that has a long and proud history, although it has only had a truly independent identity of its own since 1951. References to the area that is present Libya date back as far as 2,700BC, when ancient Egyptian inscriptions refer to troublesome Berber tribes. The Ancient Greeks, followed by the Romans, settled in Tripolitania and Cyrenaica, and there are still many rem-nants of the Roman empire in Libya, such as the famous city ruins of Leptis Magna.

The Arab conquest, along with Islam, swept across North Africa in 647AD and for the next several hundred years, Libya was a nominal part of the various Arab caliphates, although due to its remote loca-tion from the Arab heartland in the Gulf and Levant, direct rule from the caliphate capitals at Damascus and then Baghdad was limited to coastal areas only.From the 17th century onwards, the

IntroductionOttomans began to assert greater control over North Africa and this remained the case until 1911, when Italy, seeking an overseas empire, invaded Libya and took control. The Italians remained in the country until the end of the second world war, when temporary control was passed to the British under UN mandate. The UN voted to give the country inde-pendence and Libya declared its inde-pendence on 24 December 1951. For the first time, the nation was in control of its own destiny.

Initially, Libya was a monarchy ruled by King Idris al-Senussi. But Idris was a weak and ineffective ruler and civil dis-content became rife. On 1 September 1969, a group of army officers led by Muammar Gaddafi took control, follow-ing a military coup and Libya was declared a republic. Gaddafi would rule Libya until the civil war in 2011.Under Gaddafi, Libya was a ‘democracy’



with direct rule by the people through General Peoples’ Committees. However, Gaddafi was the sole decision-making authority in reality and democracy was merely an illusion. His erratic and mercu-rial personality resulted in Libya adopting several contentious and often bizarre poli-cies both at home and abroad, which resulted in the country facing UN and US sanctions throughout the 1980s and 1990s.

In 2003, Gaddafi’s government renounced terrorism and sought a rapprochement with the West. In the following two years, sanctions were lifted and there was a renewed hope that Libya would become a prime projects market and investment destination. However, in both cases this was not the case as a lack of a strong gov-ernment institutional framework, an absence of any private sector activity and a weak civil society meant that even after opening up to the world, the economy was simply unable to move forward.

The civil war and the demise of Gaddafi have once again raised hopes that Libya can start to live up to its potential. The National Transitional Council (NTC) has temporary control, with the expectation that elections for a permanent govern-ment will be held in 2012. Having thrown off the shackles and constraints of the Gaddafi era, optimism about the country’s prospects has never been higher.

where temperatures cool considerably in the winter and seasonal rain is not uncommon; and a desert climate in the interior, where temperatures soar in the summer and rain is extremely rare all year round.

Only 2 per cent of Libya receives enough rain to make human habitation possible. As a result, the vast majority of the coun-try’s 6.5 million people live in coastal cit-ies. However, the fact that Libya’s two major cities, Tripoli and Benghazi, are almost 1,000 kilometres apart has only served to accentuate regional and politi-cal differences between the Cyrenaica and Tripolitania regions. This aspect was no better demonstrated than by the fact that the 2011 uprising quickly spread in the east of the country and took some time to have an impact in the west.

Libya’s large size and small population make it one of the most thinly populated countries on earth, with a population den-sity of just 50 people a square km. More than 95 per cent of the Libyan population speaks Arabic. In the south and west, Ber-ber languages predominate.

Tribes play an important role in Libyan society, with more than 20 existing major tribal groups. Because of the geographical vastness of Libya and the prevalence of tribes being associated with specific areas or towns, political or social differences are often drawn along tribal lines.

Climate and societyLibya is primarily a desert state, with most of its geographical area falling in the Sahara desert where human habitation is impossible outside of scattered oases. It is the fourth largest country in Africa and the 17th largest in the world.

There are two main climates in Libya: a Mediterranean climate along the coast,

“Its large size and small population make Libya one of the most thinly populated countries”



The system of governmentBy definition, the NTC is a temporary government with a self-imposed mandate to oversee Libya until a permanent gov-ernment can be elected. As of November 2011, it remains unclear just what the NTC plans to implement during its period in control, but it is likely that the council is going to leave the most important deci-sions to the elected government once it comes in. This will likely include deci-sions on foreign investment, major project funding and oil sector strategy.

The new NTC cabinet, announced in late November 2011, is broadly secularist and technocratic, with a nod to the more prominent military commanders who played a key role in the civil war. Its com-position has already been welcomed by the major Western powers.

There are a number of interesting aspects about the new government. All three of the top officials are academics and have clearly been selected for their neutrality. Interestingly, both Prime Minister Abdu-raheem el-Keib and Deputy Prime Minis-ter Mustafa AbuShagur worked together at the University of Alabama in the US and, at the start of the conflict, were both working in Dubai. Both are also believed to hold US citizenship. The other deputy prime minister, Omar Abdulkarim, speaks Japanese and is understood to have strong ties to Japan.

The presence of two former senior execu-tives from Italian firm Eni on the cabinet will reassure Italy, which relies on Libyan oil and gas for much of its energy needs. It is hoped that the technocratic nature of the cabinet in general will ensure steady leadership until elections.

Structure of the economyWhile Libya enjoys the highest gross domestic product (GDP) per capita in Africa, thanks to its low population and large oil and gas reserves, it suffers from several structural issues that have impeded growth over the years. Primary among these is the centralised planning aspect of the economy and the previous distrust of private sector activity.

As such, the economy is state-dominated with only little private enterprise. There is also inequity in the distribution of growth and unemployment, especially among the young, is high. Libya also suf-fers from poor social infrastructure, par-ticularly in affordable housing, healthcare

Selected members of NTC provisional cabinet as of 22 November 2011

Name Position Remarks

Abduraheem el-Keib Prime Minister Technocrat. Professor of electrical engineering who has been living in exile from Libya since 1976, primarily in the US and the UAE. Holds dual US/Libyan citizenship. Family is from Sabrata

Mustafa AbuShagur Deputy Prime Minister

Technocrat. Professor of electrical and computer engineering who has been living in exile from Libya since the 1970s, primarily in the US and the UAE. Is thought to hold dual US/Libyan citizenship. Born in Tripoli

Omar Abdullah Abdulkarim

Deputy Prime Minister

Technocrat. Former chairman of Eni Oil in Libya and worked for Agoco before that. Has a doctorate degree in petroleum engineering from Waseda University in Japan. From Benghazi

Ashour Ben Khayil Minister of Foreign Affairs

Veteran diplomat and long-term dissident of Gaddafi regime, he left the Foreign Service in 1984 in protest over the Libyan embassy hostage crisis in London. Has been an active member of the opposition ever since. Until returning to Libya, he was a resident in Canada. Originally from Derna

Fawzi Abdulali Minister of Interior

Leader of the Misurata militia, which successfully withstood a month-long siege and much of the worst fighting during the conflict

Abdulrahman bin Yazza Minister of Oil & Gas

Technocrat. Former chairman of Eni operations in Libya. Also previously worked for NOC

Osama Juwaili Minister of Defence

Head of Zintan militia during conflict, responsible for capturing Gaddafi’s son, Saif al-Islam. Former teacher and army officer

Hassan Zaqlam Minister of Finance

Awad Barasi Minister of Electricity

NTC=National Transitional Council; Agoco=Arabian Gulf Oil Company; NOC=National Oil Corporation. Sources: NTC, MEED Insight

“Libya’s economy suffers from inequity in the distribution of growth and high unemployment rates”



“Much needs to be done to disconnect the Libyan economy from its reliance on crude exports”

and education, although the previous gov-ernment had targeted these sectors for investment over the last decade.

Like many other regional oil producers, Libya’s economy is highly dependent on crude, with oil exports comprising 97 per cent of total export revenues. Unsurpris-ingly, real and nominal GDP rises and falls with the oil price, so while real GDP fell by more than 2 per cent in 2009 as the oil price slipped below $100 a barrel, it rose by 4.2 per cent in 2010 as the oil price picked up.

With the oil price remaining steady, the Libyan economy should enjoy stable growth once oil output reaches pre-conflict levels. Nonetheless, it is clear that much needs to be done to disconnect the econ-omy from this reliance on crude exports. Whatever happens, the NTC and the gov-ernment that succeeds it, will have their work cut out in transforming it into a market economy.

Exchange rate: $1=LD1.2488; GDP=Gross domestic product. Source: IMF

Key economic indicators (LDbn unless stated)

2006 2007 2008 2009 2010

GDP, constant prices 41.7 44.8 45.9 44.8 46.7

GDP, constant prices (% change) 6.7 7.5 2.3 -2.3 4.2

GDP, current prices 72.3 86.9 116.5 73.7 90.3

GDP, current prices ($bn) 55.1 69.0 95.3 58.8 71.3

GDP per capita, constant prices (LD) 6,897.3 7,264.5 7,284.4 6,971.8 7,115.0

GDP per capita, current prices (LD) 11,967.2 14,090.4 18,505.0 11,461.4 13,768.1

GDP per capita, current prices ($) 9,112.4 11,188.7 15,140.1 9,149.4 10,872.8

Total investment (% of GDP) 22.6 26.6 27.2 34.8 35.8

Gross national savings (% of GDP) 73.6 69.8 66.1 50.8 50.2

Inflation, average consumer prices 94.5 100.3 110.7 113.9 116.7

Inflation, average consumer prices (% change) 1.4 6.2 10.4 2.8 2.5

Volume of imports of goods and services (% change) -2.6 17.4 37.6 5.0 2.2

Volume of imports of goods (% change) 1.1 26.6 9.4 17.7 11.3

Volume of exports of goods and services (% change) 7.9 3.4 -6.5 -6.8 -7.2

Volume of exports of goods (% change) 9.2 3.4 -6.5 -7.5 -7.2

Value of oil exports ($bn) 41.7 47.8 60.7 35.7 42.3

General government revenue 47.5 59.3 76.4 44.7 56.0

General government revenue (% of GDP) 65.6 68.2 65.6 60.7 62.0

General government total expenditure 23.2 33.5 46.2 40.8 48.2

General government total expenditure (% of GDP) 32.1 38.5 39.6 55.3 53.4

General government net debt -58.6 -72.4 -82.4 -81.6 -91.3

General government net debt (% of GDP) -81.0 -83.3 -70.7 -110.8 -101.1

General government gross debt 0.6 0.0 0.0 0.0 0.0

General government gross debt (% of GDP) 0.9 0.0 0.0 0.0 0.0

Current account balance ($bn) 28.1 29.8 37.1 9.4 10.3

Current account balance (% GDP) 51.0 43.2 38.9 15.9 14.4



P rior to the recent conflict, Libya was well-known as a projects market with

plenty of potential, but with little to show for it. Tripoli’s rapprochement with the US and the UK in late 2003 was greeted with enthusiasm by many companies, especially oil firms, which viewed the country as an exceptional opportunity, given its general infrastructure require-ments and the fact that it had the money to fund them.

Throughout 2004 and 2005, Libya was a prime target for business development among firms, with many establishing offices in the country in the hope of winning work. But over time, it became apparent that the country’s entrenched bureaucracy, budgetary issues and inherently slow decision-making had not changed with the opening up of the economy. At the same time, the explora-tion and production sharing agreement (EPSA IV) licensing rounds did not create

The Libyan projects market

the expected massive upstream invest-ment, while downstream investment deals with the likes of the UK’s Shell and BP failed to materialise into physical activity.

Indeed, project spending fell considerably in the immediate aftermath of the lifting of sanctions, with the total value of contracts awarded between 2003 and 2005 barely exceeding those awarded in 2002 alone. However, there was a marked increase in spending from 2006 onwards, although 2010 levels dropped substantially.

“Libya was well-known as a projects market with lots of potential, but with little to show for it”

Contract awards, 2002-10

Source: MEED Projects

($m)

010002000300040005000600070008000

20042003

20022006

2010

20052008

20072009

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0



The decrease in activity in 2009-10 was primarily due to upheaval and restructur-ing in the government, brought about by several erratic decrees by Gaddafi. The resulting bureaucratic inertia meant that many planned projects did not proceed.

Surprisingly, given its huge oil and gas potential, there has been very little capital investment in Libya’s hydrocarbons sector over the past nine years. What spending there has been has focused on upstream production and processing projects, but with less than $6bn spent in total over this period, the sector has been slow moving.

This largely reflects the relative failure of the EPSA IV licensing rounds, where international oil companies (IOCs) have been reluctant to implement field devel-opments either because oil and gas were not found in sufficient quantities or because it was not commercially viable to proceed. Even at producing fields, there has been little in the way of upgrading facilities. In some cases, this is due to lack of agreement with the IOC’s state-owned joint venture partner on how to proceed. In others, Opec quotas have meant that there was little point in increasing capac-ity if there was no export outlet.

Downstream has been even more disap-pointing, with almost no investment at all over the last decade despite an obvious need for the upgrading and rehabilitation of existing facilities. The high-profile deals

for a new petrochemicals complex with the US’ Dow Chemical Company and the revamp of liquefied natural gas (LNG) facilities with Shell failed to materialise despite bilateral government support.

The most successful sectors have been infrastructure, power and construction. Infrastructure has been the largest sector since 2002, due to large contracts to upgrade the existing airports and build a new railway network.

Power has been another key sector. Rising electricity demand, due to economic and demographic growth, has meant invest-ment in new generating schemes, although progress on individual projects has frequently been slow and erratic.

Construction, primarily in the form of social housing projects, has been the other mainstay of the Libyan projects market. Demographic growth has again been a fac-tor, with the previous regime attempting to address a considerable housing shortage.

“There has been little investment in Libya’s hydrocarbons sector over the past nine years”

Contract awards by sector, 2002-10

Infrastructure9,329

985

4,741

310%Construction

Oil/Gas production10,223

1,930

200

11,361

3,526

260

($m)


Power

Water and waste

Gas processing, 4.5

Pipeline, 2.3Industrial, 0.7 Metal, 0.6

Refining, 0.5

26.5

23.821.8

11.1

8.2



HUPEA=Housing & Utilities Project Execution Authority; Gecol=General Electricity Company of Libya; CAA=Civil Aviation Authority; HIB=Housing & Infrastructure Board; GMRA=Great Man-made River Authority; WOC=Waha Oil Company; LAP=Libya Africa Investment Portfolio. Source: MEED Projects

Selected major projects awarded, 2002-10

Project Sector Contract value ($m) Award date EPC contractors

Railway Executive Board – Sirte-Misurata-Khoms railway line Infrastructure 1,850 2008 China Railway Construction Corporation

HUPEA – Tajoura, Benghazi and Tripoli housing project Construction 1,600 2009 Amona Ranhill Consortium Sdn Bhd

Gecol – Al-Khaleej steam power plant Power 1,463 2007 Gama Energy, Doosan Heavy Industries & Construction, Hyundai Engineering & Construction

CAA -– Tripoli airport terminal, package II Infrastructure 1,350 2007 Consolidated Contractors Company, TAV Construction, Strabag Odebrecht, Vinci

Gecol – Tripoli West power plant expansion Power 1,267 2007 Archirodon Group, Doosan Heavy Industries & Construction, Hyundai Engineering & Construction

HIB – Tripoli and Benghazi infrastructure network Infrastructure 1,250 2008 Tennessee Overseas Construction Company

GMRA – Great Man-made River, phase III Water and Waste 1,246 2005 Tekfen, Frankenthal, KSB Group, TML Construction Company, SNC Lavalin Group

WOC – Farig field development, phase II Oil/Gas production 1,246 2006 Joannou & Paraskevaides

Eni – Wafa gas development Gas processing 1,200 2002 Tecnimont, Sofregaz, JGC Corporation

Gecol – 400kV overhead transmission lines Power 1,200 2007 KEC International, Saadiyat Free Trade Authority, Cobra Instalaciones y Servicios, Kahromika

GMRA – Great Man-made River, phase IV Water and Waste 1,000 2004 Al-Nahr Company

Libya Investment & Development Company – Tobruk housing development

Construction 996 2009 Sungwon Corporation

Gecol – Transmission lines and substations Power 990 2010 Technologies, Investments, Services, Energy

ESDF – Tripoli Complex towers Construction 880 2008 Consolidated Contractors Company

Railway Executive Board – Hicha-Municipalities railway line Infrastructure 840 2008 China Railway Construction Corporation

Railway Executive Board – Misurata to Sebha railway Infrastructure 824 2008 China Railway Construction Corporation, Metis

Railway Executive Board – Coastal railway Infrastructure 805 2009 China Railway Construction Corporation, Russian Railways

Gecol – Power transmission line Power 800 2008 Laptechno Power

Edkhar Bank – Tripoli housing units Construction 800 2006 Saraya Construction Company

Gecol – Sebha power station Power 750 2007 Global Electrical Services Company, Enka Teknik



The main contractorsIn terms of contracting, there have been few successful Western firms in Libya over the past decade. The market has tended to be dominated by Chinese, Russian, Korean and Turkish contractors, while local firms have had very limited success with the exception of Saraya Con-struction Company

The most successful contractor in Libya over the past 10 years, in terms of value of contracts awarded, is China Railway Con-

struction Corporation. This is due mainly to its large railway contracts with the Railway Executive Board, although it has completed some oil sector work too.

Versatile Korean contractor Hyundai Engi-neering & Contracting is in second posi-tion, due to work won in the construction, power and hydrocarbons sectors, while its compatriot Daewoo Engineering & Construction has been the dominant utili-ties contractor in the country.

Top 10 international contractors in Libya by value of work awarded


($m)

0

1000

2000

3000

4000

5000

Amona R

anhill

Consor

tium

Hyunda

i Engi

neeri

ng

& Constr

uction

Daewoo

Engin

eering

& Constr

uction

China R

ailway

Constru

ction

Corpora

tionCCC

Sungw

on Corp

oratio

n

Joann

ou &

Paras

kevaid

es Hyflux

Saraya

Constr

uction

Compa

ny Saipem

5,000

4,000

3,000

2,000

1,000

0

Nationalities of the top 10 contractors in Libya by value of work awarded*

2,579

1,300

1,600

1,000%

3,048

1,400

5,580

($m)

*2002-10. Source: MEED Projects

Korea

China

Libya

Greece

Malaysia

Singapore

Italy

34

1816

10

8

86



The leading clientsWith one exception, the major clients in Libya over the past nine years have all been government entities. By far, the most active client has been the General Elec-tricity Company of Libya (Gecol), which awarded more than $10bn worth of work between 2002 and 2010. Gecol’s ranking reflects the pressing need for power in the country, although its performance has been mixed; in many cases its projects have taken years to get off the drawing board, while contractors have complained

that it awarded contracts without neces-sarily having the required government financial approval.

A more effective client has been the Civil Aviation Authority, which awarded a raft of contracts in 2007 and 2008 to upgrade the Benghazi, Tripoli and Sebha airports.

Italy’s Eni is the only private sector and non-Libyan client on the list due to its significant investment in the Western Desert Gas project. The Railway Executive

Top clients in Libya based on awarded contracts, 2002-10

Gecol=General Electricity Company of Libya. Source: MEED Projects

($m)

0

2000

4000

6000

8000

10000

12000

Gecol

Civil Av

iation

Autho

rity Eni

Railway

Execut

ive Boa

rdHou

sing &

Infras

tructu

re Boa

rd

Great M

an-m

ade R

iver

Autho

rity

12,000

10,000

8,000

6,000

4,000

2,000

0



Board is the client behind major projects won by Chinese and Russian firms to build a coastal railway linking Tripoli with Benghazi.

The Housing & Infrastructure Board (HIB) is responsible for infrastructure, housing and wastewater development in the major cities. It had a significant investment plan that was curtailed by the conflict. It remains to be seen whether the plan will continue under the new government.

Future projectsPrior to the conflict, Libya had more than $120bn worth of planned projects. The majority were in the construction sector, consisting primarily of the two Energy City projects at Ras Lanuf and Marsa al-Brega, as well as the Madinat al-Hana development planned by the UAE-based Tatweer.

Metals was the second largest sector as a result of two aluminium smelters that had been planned by Russia’s Rusal and Swit-zerland’s Klesch & Company, while power and oil and gas production – the two tra-ditionally largest sectors in the country – each had more than $5bn worth of invest-ment planned.

Due to the upheaval, it is unlikely that all of the projects planned before the conflict will proceed under the new administra-tion. Even before the conflict, there was considerable doubt about the viability of

Budget value of planned projects prior to the conflict

LNG=Liquefied natural gas. Source: MEED Projects

($m)

0100002000030000400005000060000700008000090000

Constr

uction

Fertilis

er

Gas pro

cessin

g

Indust

rial

Infras

tructu

re LNG

Metal

Oil/Gas

produ

ction

Petro

chemica

lsPo

wer

Refining

Water a

nd wast

e

90,000

80,000

70,000

60,000

50,000

40,000

30,000

20,000

10,000

0

“Libya’s projects market is expected to accelerate once the new government has settled in”

many of them. New ministers and per-sonnel at clients will almost certainly want to revisit each project to determine its viability. In parallel, foreign investors may well have second thoughts about their project investment plans in Libya.

Whatever happens, the contracting com-munity can be relatively sanguine about the Libyan projects market going for-ward, due to the twin combination of the country’s significant infrastructure requirements and its financial ability to pay for projects. The projects market is expected to accelerate once the new government is settled in, with the hope that it can comfortably exceed the $5-8bn annual average witnessed over the past decade.



L ibya has long been seen as a country with huge, if unfulfilled, potential as

a major producer and exporter of oil and gas, refined fuel products and petrochem-icals. This is with good reason. According to the UK’s BP, the country had the eighth largest oil reserves in the world in 2010, with 46.4 billion barrels and the largest in continental Africa.

However, BP data shows that Libya only produced 1.66 million barrels a day (b/d) of oil on average in 2010, making it the world’s 18th largest producer of oil behind relative minnows Kazakhstan, Algeria, Angola and Norway. Among the 12 Opec member states, Libya produced the ninth largest amount of oil in 2010, despite having the seventh largest reserves overall. It should be noted that when compared to BP’s estimates, Opec

Oil & Gas Introduction and background

cites a lower 2010 production figure for Libya of 1.49 million b/d and slightly larger reserves of 47.1 billion barrels of oil.

“According to the UK’s BP, Libya had the eighth largest oil reserves in the world in 2010”



Oil output peaked at 3.34 million b/d in 1970, which made Libya a bigger pro-ducer than Saudi Arabia at the time. This was a year after former Libyan leader Muammar Gaddafi seized control of the country in a military coup and the same year that state oil firm National Oil Cor-poration (NOC) was formed in place of the Libyan General Petroleum Company (Lipetco), created in 1968 to work on a strategic plan for the state-led develop-ment of the petroleum industry.

NOC started the process of nationalising the country’s oil assets almost from its inception, a process that coincided with a steady decline in output. Production reached a historical low of 1.02 million b/d in 1984.

From 1984 onwards, production rose steadily despite UN and US trade embar-goes against Libya, with sanctions imposed by the latter lasting from 1986 to 2004. In 2008-09, average daily pro-duction topped 1.8 million barrels,

“The National Oil Corporation started nationalising Libya’s oil assets almost from its inception”

Source: BP

*=Includes condensates; kb/d=Thousand barrels a day. Source: BP

b/d=Barrels a day. Source: Opec

Top 20 oil reserves by country

Country Proven reserves (billion barrels), 2010

Saudi Arabia 264.5

Venezuela 211.2

Iran 137.0

Iraq 115.0

Kuwait 101.5

UAE 97.8

Russian Federation

77.4

Libya 46.4

Kazakhstan 39.8

Nigeria 37.2

Canada 32.1

US 30.9

Qatar 25.9

China 14.8

Brazil 14.2

Angola 13.5

Algeria 12.2

Mexico 11.4

India 9.0

Top 20 oil-producing countries by output

Country 2010 production

(kb/d)

1 Russian Federation 10,270

2 Saudi Arabia 10,007

3 US 7,513

4 Iran 4,245

5 China 4,071

6 Canada 3,336

7 Mexico 2,958

8 UAE 2,849

9 Kuwait 2,508

10 Venezuela 2,471

11 Iraq 2,460

12 Nigeria 2,402

13 Brazil 2,137

14 Norway 2,137

15 Angola 1,851

16 Algeria 1,809

17 Kazakhstan 1,757

18 Libya 1,659

19 Qatar* 1,569

20 UK 1,339

Oil production of Opec countries

Country Production (million b/d)

1 Saudi Arabia 8.17

2 Iran 3.54

3 Venezuela 2.85

4 Iraq 2.35

5 Kuwait 2.32

6 UAE 2.23

7 Nigeria 2.05

8 Angola 1.69

9 Libya 1.49

10 Algeria 1.19

11 Qatar 0.733

12 Ecuador 0.476



although it fell again in 2010 as Tripoli abided by its Opec production quota of 1.47 million b/d. The increase in produc-tion during the sanctions era was largely attributed to the return of international oil companies (IOCs) to the country and the lifting of embargoes on crucial equipment to the country.

In 2010, Oil Minister and NOC chairman Shokri Ghanem announced that oil produc-tion would hit 2.3 million b/d in 2013-14 and 3 million b/d by 2017. Earlier estimates from NOC had pegged output at 2.5 million b/d by 2011-12 and 3 million b/d by 2015. MEED Insight research that was conducted for this report shows that overall produc-tion capacity at the end of 2010 was as high as 1.9 million b/d and much higher than the official Opec quota.

Oil and gas basinsThe oil and gas industry has six major geo-graphic areas where the vast majority of exploration and production occurs: the Pelagian, Ghadames, Murzuq, Sirte, Kufra and Cyrenaica basins. Prior to 2011, explo-ration and development work was also ongoing off the country’s coast in the wider Gulf of Sirte, although offshore production has played only a limited role in the coun-try’s hydrocarbons sector to date.

The offshore Pelagian basin sits to the northwest of Tripoli and contains seven oil and gas concessions. Its most notable acreage is the Bouri and Al-Jurf fields.

EGYPT

NIGER

TUNISIA

LIBYA

CHAD

SUDAN

Tripoli

Major onshore oil producing basins

Source: NOC

The Ghadames basin, which borders both Algeria and Tunisia, is the site of 23 con-cessions and most notably contains the Wafa gas field, operated by Mellitah Oil & Gas, a joint venture of Italy’s Eni and NOC.

The Murzuq basin in the southwest borders Niger and holds 29 concessions, which include both Eni’s major Elephant field, also known as the El-Feel field, and Spain-based Repsol’s Sharara field.

Sirte, which stretches along the Libyan coast from Tripoli to Benghazi and south to the border with Chad, is both the largest basin and the country’s most prolific source of oil. It holds more than 50 concessions and includes some of the state’s most important fields, such as Mabruk, Sarir, Al-Sarah Amal, Aguila/Nafoora and Bu Attifel. It contains the vast majority of the country’s oil and gas reserves – 42-43bn barrels of oil equivalent (boe) of oil and gas.

The Cyrenaica basin to the east contains a further 15 concessions, none of which

“Exploration and development work was ongoing off the country’s coast in the Gulf of Sirte”

Cyrenaicaplatform

Murzuq basin

Sirte basin

Gulf of Sirte

Ghadames basin

Pelagian basin

Kufra basin



“Libya’s refining capacity is situated at Ras Lanuf, Sarir, Azzawiya, Tobruk and Marsa al-Brega”

have been commercialised to date, while the Kufra basin is home to a further nine concessions that are also in the prospect-ing phase.

Production facilities in all basins are connected by a 7,000km network of pipe-lines to export facilities at Marsa al-Brega, Tobruk, Ras Lanuf, Azzawiya and Zueitina.

The country’s refining capacity is situated at Ras Lanuf, Azzawiya, Tobruk, Marsa al-Brega and Sarir, while small petro-chemicals plants are located at Ras Lanuf, Marsa al-Brega and Abu Kammash.

EGYPT

NIGER

TUNISIA

LIBYA

CHAD

SUDAN

Tripoli

Misurata

Sirte

El-SiderRas Lanuf

Marsa al-Brega

Zueitina

Khoms

ZuaraAzzawiya

Benghazi

Derna

TobrukBir Tiacsin

Emgayet

Oued Tahara

Gozeil

Kabir

BouriD1

G1

E1

Tigi

Wafa

Atshan

Sharara

Khalifa

Balat/Samah

Sabah

Aswad

Zella

Ed Dib

Dahra

Bahi

Mabruk

Farad/Hofra

Bualwan

Almas

Bel Hedan

Defa

Sarir

Majed/Messla

Sarir N.

Katib/ RimalBu Attifel

Aguila/Nafoora

Amal/Al-SarahEl-Meheiriga

RalehJebel

NasserZaggut

Kotla/Ora

GragubaHateiba

Intisar

GialoAl-Waha

Ain Jerbi/Meghil/Sorra

Lehib Dor Marada

Elephant

Oued Chebbi

Hamada/Al-Hamra

LNG=Liquefied natural gas. Source: NOC

Tanker terminal

Oil pipeline

Oil pipeline

Gas pipeline

Major gas processing plant

Oil fields

LNG export plant

Oil refinery

Gas or gas/condensate fields

Production facilities, pipelines, export facilities, refineries and petrochemicals plants



Oil was first discovered in Libya in 1959. The government at the time was led by King Idris and was relatively weak with only nominal control outside the main cit-ies. As a result, when Libya’s first oil and gas law for the sector was passed in 1955, it effectively handed control of all aspects of the industry – from shoulder-ing development costs to setting prices – to international oil companies (IOCs) that had won exploration and production rights through direct negotiations with the Petroleum Ministry.

The new law allowed IOCs to produce and export as much oil as they liked while set-ting prices as they saw fit, with the Petro-leum Ministry acting as a tax-gathering authority, but having no strategic oversight of the development of the sector. As a result, until the late 1960s, Libyan oil was among the cheapest in the world despite being an attractive, light, sweet crude.

In the second half of the 1960s, the gov-ernment began to take more of an inter-est in growing the role of the state in the production and export of hydrocarbons and started planning a new petroleum law, which was implemented in 1966, giving Tripoli more of a say in the way the indus-try was run. In 1968, Libya became one of the first Arab countries to negotiate a joint venture agreement with France’s

ERAP-Aquitaine and established the first state-run oil company, the Libyan General Petroleum Company (Lipetco).

In 1969, a 27-year-old officer named Muammar Gaddafi oversaw a military coup that resulted in the toppling of the monarchy. Under him, Lipetco was replaced with National Oil Corporation (NOC), while the government began to make moves to part-nationalise the oil industry. A new subsidiary, Arab Gulf Oil Company (Agoco), was set up to act as NOC’s main operating firm and between 1969-73, it was awarded 24 concessions – the majority of those made available during this period.

In 1972, Eni’s subsidiary Agip agreed to Agoco taking a 50 per cent interest in the Bu Attifel field and from this period onwards the new government asked for a 51 per cent interest in all existing conces-sions and new licences. This led to dis-putes, and a decline in exploration activity.

In 1974, Tripoli offered an official EPSA for the first time on all new concessions, with the first such award being made in February of that year. NOC took a majority stake of 85 per cent in the concessions offered, while the US’ Occidental Petro-leum committed to explore the available areas and repay any development costs to

NOC if oil was commercialised. Later agreements under EPSA I saw the govern-ment take a stake of 80 per cent plus.

In 1980, the existing EPSA was updated to increase the state’s revenue from oil and gas concessions, with the new agree-ments described as EPSA II. A lack of suc-cess saw the licences changed again in 1988 to allow foreign firms a bigger share of concessions. The new terms were named EPSA III.

Exploration and production activity slowed between the late 1980s and early 2000s, largely because of international sanctions and trade restrictions placed on Libya by the US in particular. From 2001, rela-tions between Tripoli and the West slowly thawed and in 2004, the US lifted the last of its embargoes on Libyan trade.

With the lifting of sanctions came new opportunities for the development of the oil and gas sector and NOC went to work on preparing new terms for future and existing exploration and production con-cessions, known as EPSA IV, which were introduced in 2004.

Under EPSA IV, NOC asked for a minimum 50 per cent share in all new concessions – unless consortiums were involved, when it would consider a share of about one-

third of equity – while IOCs took on the cost of exploration and evaluation activities.

Development costs for new commercial prospects were to be shared equally between NOC and its foreign partners, while the cost of running production facilities was to be split along the lines of equity shares. Where production was found to be commercially viable, the EPSA agreements ran for 25 years from the ini-tial production.

Winning bidders committed to two pay-outs to NOC – a signing-on bonus and a first-production bonus – and operating companies working in the country paid a tax on their net profits after accounting for royalty payments to NOC.

Four rounds of contracts were awarded under EPSA IV, from 2004-07. The final auction focused on associated gas assets and was one of the most financially lucra-tive for NOC.

Separately, in 2007, BP directly negoti-ated an EPSA agreement with NOC, which covered a vast swathe of the West-ern Ghadames basin. The UK company committed to spend about $900m on the project, which marked its return to work in the country for the first time in 30 years.

History of production and exploration and production sharing agreements (EPSAs)



IntroductionLibya has dozens of active oil and gas fields across its main basins. Most pro-duction is located far inland and one of the chief challenges over the years has been for National Oil Corporation (NOC) and the international oil companies (IOCs) to find a means of transporting crude and gas to the coast for export. In many cases, different fields and conces-sions share the same pipeline export infrastructure. But it has also meant that it is difficult to make small and isolated fields commercially viable, given the added cost of building an export pipeline. The Pelagian basin

The Bouri fieldOil and gas production from the offshore Pelagian basin is dominated by the Bouri field, which sits within the NC-41 con-cession. It is jointly operated by Italy’s Eni and NOC, through the Mellitah Oil & Gas venture. The field was discovered in 1976 and two production platforms were commissioned in 1988. Initial production was as high as 600,000 barrels a day (b/d), but by 1995, output had dropped to about 150,000 b/d and by 2004, had fallen again to about 60,000 b/d. In 2010,

Major oil fields and transport networks

maximum production capacity was about 45,000 b/d.

The two oil production platforms at the field are connected to a floating storage and offloading (FSO) terminal, which directly transfers oil produced at the field to oil tankers for export.

Italy’s Saipem, was the lead engineering, procurement and construction (EPC) contractor during the development of the field. It has completed additional work since 2004 as Eni has made inroads towards halting the slide in output.

The NC-41 concession includes the Bahr Essalam gas field, which is con-nected by a 110-kilometre pipeline to gas processing and export facilities at Melli-

“Oil and gas production from the Pelagian basin is dominated by Italian firm Eni’s Bouri field”



“The Ghadames basin is the site of one of Libya’s most significant gas developments”

tah. This is part of the Western Libya Gas Pipeline development.

To the southwest of the Bouri field lies the Al-Jawf field, part of the NC-137 con-cession owned and operated by France’s Total (37.5 per cent), Germany’s Winter-shall (12.5 per cent) and NOC (50 per cent). Like the Bouri field, oil produced from this field is transported to an FSO terminal. In 2010, maximum output at the field was estimated at 45,000 b/d.

The Ghadames basinThe Ghadames basin is the site of one of the most important gas developments in Libya and also produces significant vol-umes of oil.

The Western Libyan gas project/GreenstreamDiscovered in 1991, the most significant hydrocarbons site in western Libya is the Wafa field, which was developed by a 50:50 joint venture of Eni and NOC. Oil and gas production on the scheme started in September 2004.

Some 15 oil wells and 22 gas wells were drilled at the field with the stated aim of producing about 600 million cubic feet a day (cf/d) of gas and 60,000 b/d of oil, with production understood to have been at around these levels in 2010. Production and processing facilities at the field are connected to two pipelines, one for oil and another for gas, which transport hydrocar-

bons to export and processing facilities at Mellitah on the northwest coast.

From Mellitah, the gas processed at Wafa is transported via a subsea pipeline, known as Greenstream, to Gela in south-ern Italy, along with gas produced at the offshore Eni-operated Bahr Essalam field. Saipem was the main contractor for most of the work on the Western Libyan Gas Project and Greenstream pipeline.

The Al-Hamra fieldsThe remainder of the major oil and gas assets located in the Ghadames basin is largely made up of fields operated by Ara-bian Gulf Oil Company (Agoco), a subsidi-ary of NOC. These fields, about 13 in total, all lie within the block 66 concession held by the company and have been collectively named the Al-Hamra, or Hamada, system. Oil from these fields is collected at a cen-tral facility and transported to processing and export installations via a 241km pipe-line, which has been upgraded in recent years to incorporate supplies from the

TUNISIA

LIBYA

Western Libyan gas project facilities and pipelines

km=Kilometres. Source: Eni

Greenstream520km

Gas pipeline 32”

110 kmGas pipeline 36”

Oil and condensates 10”

530kmGas pipeline 32”

Oil and condensates 16”

Bahr Essalam

Gela

Mellitah

Wafa



Murzuq system in the south of the country. In total, the system produced about 12,500 b/d of oil in 2010.

The Murzuq basin

The Sharara fieldSpain’s Repsol is the operator of Sharara, part of the NC-115 concession, along with Austria’s OMV and France’s Total.

Sharara is one of the biggest producers of oil in the country, with a maximum output of 360,000 b/d; in 2010, it pro-duced about 290,000 b/d. It is linked to the Hamada/Al-Hamra system processing and distribution facilities in the Ghad-ames basin by a 520km pipeline.

The Elephant (El-Feel) fieldThe Elephant, or El-Feel, field, was one of the most significant oil discoveries to be made in recent years in Libya, when a UK-Italian-Korean consortium first found oil in 1997. Following an Eni takeover of the UK partner, Lasmo, the field was developed by Eni, NOC and South Korea’s Korean National Oil Company, with Eni acting as operator.

On commissioning in 2004, the field produced about 10,000 b/d and this was ramped up to 125,000 b/d in 2006. Estimates on peak production capacity vary from 130,000-140,000 b/d, but the field produced 127,000 b/d on average in 2010.

When it was first commissioned, El-Feel was linked to Repsol’s Sharara facilties by a 75km pipeline, with its oil transported by the Repsol-operated pipeline to the Hamada/Al-Hamra system. In 2004, Eni contracted Egypt’s Petrojet to construct a $180m purpose-built pipeline, which connects the field directly with Mellitah, following the path of the existing Sharara pipeline, first to Hamada and then north. The El-Feel-Sharara pipeline is still func-tional and can be utilised if necessary.

In September 2011, Eni confirmed that it was still in talks to sell half of its stake in the field to Russia’s Gazprom.

NC-186NC-186 is another Repsol-operated con-cession. Its partners in the field are OMV, Total, Norway’s Statoil and NOC. Oil was first discovered in 2006 and as of 2010, it was producing about 80,000 b/d of oil, with hydrocarbons transported to Sharara via a 31km pipeline. In 2009, Repsol announced another major discovery

“The El-Feel-Sharara pipeline is still functional and can be utilised if necessary”



“The Sirte basin is one of the world’s biggest petroleum provinces and has 16 giant oil fields”

within the bounds of the concession, but as of 2010, was yet to announce a major addition to the overall output of NC-186.

The Sirte basin

The Sirte basin is the most productive area of Libya and is also the most heavily exploited. It is one of the world’s biggest petroleum provinces and has 16 giant oil fields, with reserves of 500 million barrels or more. Among its most prolific assets are the Nasser, Amal, Al-Waha, Nafoora, Intisar, Gialo and Bu Attifel oil fields and the Graguba gas field.

The fields are connected by pipelines to oil and gas processing and distribution facilities at the Bahi, Fahra, Al-Waha, Amal and Bu Attifel fields. These facilities are in turn linked with coastal processing and export facilities at El-Sider, Marsa al-Brega, Zueitina, Benghazi and the Marsa al-Hariga terminal at Tobruk.

The Bahi-El-Sider systemThe Bahi facilities connect the Mabruk, Bahi and Dahra fields to the country’s oil and gas network via a 46km pipeline, run by Waha Oil Company (WOC), to El-Sider. The Mabruk field is a part of the C-17 concession operated by Mabruk Oil Oper-ations. Its shareholders are Total with 37.5 per cent, Statoil with 12.5 per cent and NOC holding the remainder. It pro-duced about 23,000 b/d of oil in 2010.

The Dahra field, meanwhile, is owned and operated by WOC, a joint venture of NOC (59.2 per cent) and a group of US compa-nies known as the Oasis Consortium, whose shareholders are ConocoPhillips (16.3 per cent), Marathon Oil (16.3 per cent) and Hess (8.2 per cent).

The Gialo-Samah-El-Sider systemWOC also produces oil at the Al-Waha, Samah and Gialo fields and operates the 550km pipeline that links them with the El-Sider export terminal. In total, WOC can produce about 170,000 b/d from the Al-Waha field and a further 190,000 b/d from the smaller reservoirs.

The Gialo-Samah pipeline system also car-ries oil produced by Harouge Oil Opera-tions (HOC), a joint venture of Canada’s Pet-roCanada (50 per cent) and NOC (50 per cent). HOC operates the El-Naga, Ghani and Amal fields, which have a combined aver-age output of approximately 60,000 b/d.

The Defa-Marsa al-Brega, Jebel-Marsa al-Brega systemsTwo further major pipelines pass through the WOC facilities. A 299km gas pipeline travels north from the southern Defa field to Marsa al-Brega and connects to the giant Nasser and smaller Hateiba fields. A second oil pipeline travels north to El-Sider through the Zaggut and Graguba field facilities, which are operated by the state-run Sirte Oil Company (SOC), and the Tibitsi field operated by Harouge.

The Graguba field is further connected to a 171km oil pipeline linking the SOC-operated Jebel and Nasser fields with Marsa al-Brega. In total, SOC can produce about 100,000 b/d of oil from the fields it operates, with Nasser contributing about 30,000 b/d at most. Tibitsi has a maxi-mum output of about 20,000 b/d.

The Rimal-Intisar-Zueitina systemTo the east of the Sirte basin lie the Rimal and Bu Attifel oil fields, which are operated by Mellitah Oil & Gas. Oil from the fields is transported to Zueitina in eastern Libya via a 347km pipeline. The pipeline also connects the Intisar oil field to the coastal town. Intisar is operated by Zueitina Oil, a joint venture of NOC (83 per cent), the US’ Occidental (12.25 per cent) and OMV (4.75 per cent).

Gas from Bu Attifel and Intisar is transported to Zueitina by a separate 360km pipeline. Rimal produced a maxi-mum of about 30,000 b/d before 2011, while Bu Attifel’s output was about 73,000 b/d. Zueitina Oil claims that Intisar had a maximum output capacity of 60,000 b/d, although non-company sources say that 2010 production was closer to 40,000 b/d.

The Sarir-Marsa al-Hariga sys-temThe Sarir field, to the southeast of the Sirte basin, produced a maximum



of 200,000 b/d in 2010 and is one of the country’s most significant fields. It is operated by Agoco and is connected directly to the Marsa al-Hariga export ter-minal, located next to the northeastern town of Tobruk, by a 509km pipeline. This pipeline also passes through the Rimal field.

The Sarir-Messla, Messla-Amal-Aguila/Nafoora, Amal-Ras Lanuf systemSarir is further connected to the Gialo field to the west by a short trunkline and to the Messla field to the north. Messla is part of an Agoco-run network, which links the Amal/Al-Sarah and Aguila/Nafoora fields via a 420km pipeline. Oil is then passed through a second 420km pipeline to the Ras Lanuf export and refining terminal.

Agoco produced about 140,000 b/d of oil from the Nafoora/Aguila fields in 2010 and 55,000 b/d from the Messla field. The Al-Sarah/Amal fields, in which Petro-Canada and Wintershall hold stakes, pro-duced a total of about 120,000 b/d.



Oil fields, locations, producers and capacities

Field Basin Operator Shareholders (%)

Production capacity, 2010

(kb/d)

Al-Jawf Pelagian Murzuq NOC (50), Total (37.5),

Wintershall (12.5)

45

Bouri Pelagian MOG NOC (50), Eni (50)

44.5

Hamada/ Al-Hamra system

Ghadames Agoco NOC (100) 12.5

Sharara Murzuq AOO NOC, Repsol, OMV, Total 290

Elephant (El-Feel) Murzuq MOG NOC (33.33), KNOC (33.33), Eni (33.33)

127

NC-186 Murzuq AOO NOC, Repsol, Total, OMV, Statoil 80

Al-Waha Sirte WOC NOC (50.2), ConocoPhillips (16.3), Marathon Oil (16.3),

Amerada Hess (8.2)

170

Samah Sirte WOC NOC (59.2), ConocoPhillips (16.3), Marathon Oil (16.3),

Amerada Hess (8.2)

25

Dahra Sirte WOC NOC (50.2), ConocoPhillips (16.3), Marathon Oil (16.3),

Amerada Hess (8.2)

25

Gialo Sirte WOC NOC (50.2), ConocoPhillips (16.3), Marathon Oil (16.3),

Amerada Hess (8.2)

140

Mabruk (C-17) Sirte Total NOC (50), Total (37.5),

Statoil (12.5)

20

Ghani Sirte Harouge Oil Operations

NOC (50), PetroCanada (50) 20

Al-Jufra Sirte Harouge Oil Operations


kb/d=Thousand barrels a day; MOG=Mellitah Oil & Gas; AOO=Akakus Oil Operations; Agoco=Arabian Gulf Oil Company; WOC=Waha Oil Company; NOC=National Oil Corporation; KNOC=Korean National Oil Corporation; SOC=Sirte Oil Company; na=Not available; The table above breaks down the major Libyan oil fields by location, detailing maximium output capacity as of 2010. On the basis of this data, maximum output in the country could have been as high as 1.81 million barrels a day by the end of the year, with output likely constrained by a combination of infrastructure and Opec quotas. Source: MEED Insight

Oil fields, locations, producers and capacities (Continued)

Field Basin Operator Shareholders (%)

Production capacity, 2010

(kb/d)

Tibisti Sirte Harouge Oil Operations


El-Naga Sirte Harouge Oil Operations


Graguba Sirte SOC NOC (100) na

Nasser Sirte SOC NOC (100) na

Lehib Dor Marada Sirte SOC NOC (100) na

Jabal Sirte SOC NOC (100) na

Ralah Sirte SOC NOC (100) na

Arshad Sirte SOC NOC (100) na

Ain Jerbi Sirte SOC NOC (100) na

Wafa Sirte SOC NOC (100) 100

Bu Attifel Sirte MOG NOC (50), Eni (50)

73.4

Rimal Sirte MOG NOC (50), Eni (50)

30

Intisar Sirte Zueitina Oil NOC (83), Occidental (12.25),

OMV (4.75)

40

Sarir Sirte Agoco NOC 200

Nafoora Sirte Agoco NOC 140

Messla Sirte Agoco NOC 55

Al-Sarah Sirte Wintershall NOC (50), WIntershall (25), Gazprom (25)

90

Amal Sirte Harouge Oil Operations




IntroductionLibya’s major oil and gas export terminals and its refining and petrochemicals facilities are nearly all located along the country’s coastline. They stretch from Abu Kammash, Mellitah, Azzawiya in the west to El-Sider, Ras Lanuf, Marsa al-Brega and Zueitina in the centre and Marsa al-Hariga, which is located next to the eastern town of Tobruk.

In total, Libya was exporting on average 1.5 million barrels a day (b/d) of oil products in December 2010 and January 2011, with exports completely ceasing at the height of the civil war. The country’s refineries have a total nameplate capacity of 380,000 b/d, although total output of refined products was closer to 410,000 b/d in 2009 and 2010. Domestic consumption of refined fuel products hit about 270,000 b/d in 2010, with the remainder exported largely to European markets.

Despite its huge natural wealth, Libya’s downstream and petrochemicals indus-tries is underdeveloped. The country’s first major projects were commissioned in the late 1970s and early 1980s, shortly before US and UN sanctions made fur-

Export, refining and petrochemicals facilities

ther development of refining or petro-chemicals capacity difficult.

The country’s total nameplate petrochemi-cals production capacity is 2.9 million tonnes a year (t/y), although actual output has recently averaged at about 2 million t/y, according to sources in the country.

Abu KammashThe Abu Kammash petrochemicals com-plex sits in the far west of Libya and is operated by state-owned General Company for Chemical Industries. Its facilities, com-missioned in 1980, include a 140,000-t/y ethylene dichloride plant, a 60,000-t/y vinyl chloride monomer (VCM) plant and a 60,000-t/y polyvinyl chloride (PVC) plant. Other chemicals produced at the complex include caustic soda, table salt,

“The country’s total petrochemicals production capacity is 2.9 million tonnes a year”



“The Mellitah complex contains a sulphur recovery plant for treatment of sour gas”

chlorine, hydrochloric acid and sodium hydrochloride, all of which are sold into the local market.

The main feedstocks are salt, which is pro-duced at the nearby Sebkha salt mine and is used to produce chlorine and caustic soda; and ethylene, which is transported to the complex by tanker from a loading jetty. The ethylene is mixed with chlorine gas to produce VCM. The VCM is then used as the main feedstock for the hydrochloric acid and PVC units.

In 2010, the Libyan Investment & Privatisa-tion Board planned to list General Com-pany for Chemical Industries on the Tripoli bourse, but did not manage to accomplish this before the uprising took place.

MellitahThe Mellitah facilities are operated by Mellitah Oil & Gas, a 50:50 joint venture of Italy’s Eni and NOC, and are dedicated to processing and exporting oil and gas from the onshore Wafa and offshore Bahr Essalam fields. The complex is made up of two plants: the Wafa Coastal plant, which treats the oil and condensates pro-duced at Wafa, and the Mellitah plant, which processes the gas and condensates produced at Bahr Essalam.

The Wafa Coastal plant has two treatment trains, which have a total capacity of 76,300 b/d of oil and liquids. The Melli-tah plant has three gas processing trains

and one oil/condensate train, which have a total capacity of 695 million cubic feet a day (cf/d) and 31,000 b/d respectively. The complex also contains a sulphur recovery plant for the treatment of the sour gas from Bahr Essalam, which has a capacity of 450 tonnes a day.

Gas from the Mellitah complex is trans-ported to the Greenstream gas compres-sion facilities, based at the same site, which have a total capacity of 10 billion cubic metres a day. The main Mellitah facilities were built by a consortium of Switzerland’s ABB, South Korea’s Hyundai Engineering & Construction and Italy’s Saipem.

AzzawiyaFurther down the coast to the east lies the Azzawiya terminal, whose site also includes one of the country’s main refiner-ies. The 120,000-b/d facility is owned and run by NOC subsidiary Azzawiya Refining Company (ARC). NOC had planned to revamp the refinery, commissioned in



1974 and expanded to its current capacity in 1977, in order to improve the volume and quality of its output. However, after years of delay, NOC announced in 2010 that it was looking for a foreign partner to take a 50 per cent stake in ARC and partic-ipate in the expansion.

ARC also operates the Azzawiya oil terminal, which consists of three offshore berths that can handle tankers with capac-ities of 140,000 tonnes, 100,0000 tonnes and 20,000 tonnes. According to the UK’s Lloyds Maritime Intelligence, 311,000 b/d of oil and petroleum products were exported via the Azzawiya terminal in December 2010.

El-SiderEl-Sider is the location of the single biggest export terminal in Libya, with 447,000 b/d of crude passing through the central coastal facilities in January 2011. The terminal is owned and oper-ated by Waha Oil Company, a joint ven-ture of NOC and the US’ ConocoPhillips, Marathon Oil and Hess.

The terminal has four offshore crude load-ing berths, two that can load 40,000 barrels an hour (b/hr), while the third and fourth transport oil at 35,000 b/hr and 50,000 b/hr. The terminal also comprises storage facili-ties capable of holding up to 6 million bar-rels of oil.

Ras LanufThe Ras Lanuf terminal is the site of Lib-ya’s biggest refinery and the majority of the country’s petrochemicals facilities. The Ras Lanuf Oil & Gas Processing Company (Rasco), an NOC unit, operates the 220,000-b/d Ras Lanuf refinery, along with the associated petrochemicals facili-ties: a 1.2 million-t/y naphtha cracker, which produces 330,000 t/y of ethylene, 170,000 t/y of propylene, 130,000 t/y of C4s and 335,000 t/y of gasoline.

In 2007, NOC announced plans to upgrade the facilities, and that April, signed a heads of agreement with the US’ Dow Chemical Company for a $2bn expansion of the complex. In 2009, the state-run Eco-nomic & Social Development Fund announced a $54bn development plan to turn Ras Lanuf and Marsa al-Brega into giant energy cities, which would include the proposed Dow deal.

The Ras Lanuf terminal includes four offshore berths, which can

“The El-Sider terminal has storage facilities that can hold 6 million barrels of oil”



accommodate ships with capacities of 130,000-300,000 tonnes.

Marsa al-BregaThe refining and export facilities at Marsa al-Brega are smaller than elsewhere in the country and are among the oldest. The port is run by Sirte Oil Company (SOC), which is headquartered there and also operates the refinery, which has a name-plate capacity of 10,000 b/d.

The port also contains ammonia and urea production facilities with nameplate capacities of 700,000 t/y and 900,000 t/y respectively, operated by the Libyan Nor-wegian Fertiliser Company (Lifeco), a joint venture of Norway’s Yara Interna-tional (50 per cent), NOC (25 per cent) and the Libyan Investment Authority (25 per cent). Lifeco is one of the few recent foreign investment success stories in Libya.

On average, about 90,000 b/d of oil was exported from the Marsa al-Brega terminal in December 2010, a figure which fell to 51,000 b/d in January 2011.

The port has three offshore oil transfer berths, all of which can accept tankers of up to 300,000 tonnes, and two additional berths for liquefied natural gas (LNG) and liquefied petroleum gas (LPG).

“The refining and export facilities at Marsa al-Brega are smaller than in the rest of Libya”



The LNG facilities were among the first of their kind in the world when they were commissioned in 1970, but have long since fallen into disrepair. In 2008, the UK/Dutch Shell Group signed an agree-ment to jointly redevelop the LNG facili-ties with SOC and NOC. Under the plan, the port’s LNG production capacity would have risen to 3.2 million tonnes a year (t/y) from about 700,000 t/y.

ZueitinaThe Zueitina export terminal can accom-modate as many as five tankers of up to 270,000 tonnes each and has a maximum oil transfer capacity of 6,500 tonnes an hour (t/hr). The terminal also has four loading berths for LPG exports. In Decem-ber 2010, it handled 311,000 b/d of the country’s exports, although this fell to 199,000 b/d in January 2011.

The terminal can store 6.5 million barrels of crude oil, 988,000 barrels of naphtha, 240,000 barrels of butane and 270,000 barrels of propane. It is operated by Zueitina Oil, a joint venture of NOC, the US’ Occidental and Austria’s OMV.

Tobruk/Marsa al-HarigaThe Marsa al-Hariga terminal is run by Agoco and has three offshore loading berths capable of handling tankers of up to 120,000 tonnes and transferring oil and fuel products at up to 8,000 t/hr. It has about 116,500 cubic metres of storage facilities. The terminal is linked by a

t/hr=Tonnes an hour; dwt=Dead weight tonnes; na=Not available; LPG=Liquefied petroleum gas; LNG=Liquefied natural gas; t/y=Tonnes a year; LLDPE=Linear low-density polyethylene; HDPE=High-density polyethylene; b/d=Barrels a day; NOC=National Oil Corporation. Source: MEED Insight

Export terminals

Terminal Oil capacity Speed (t/hr) Gas capacity

El-Sider 3 X tankers of 250,000 dwt 6,600 na

Marsa al-Brega 3 X tankers of 300,000 dwt na 2 X berths (LPG, LNG)

Tobruk (Marsa al-Hariga) 3 X tankers of 120,000 dwt 8,000 na

Ras Lanuf 3 X tankers of 250,000 dwt 7,000 na

Azzawiya 5 X tankers 175,000 dwt 6,500 na

Zueitina 5 X tankers 270,000 dwt 6,500 4 X LNG loading stations

Refineries

Refinery Operator Nameplate capacity (b/d)

2010 output (b/d)

October 2011 status

Ras Lanuf Ras Lanuf Oil & Gas Processing Company

220,000 220,000 Under repair; end 2011 recommissioning

Azzawiya Azzawiya Oil Refining Company

120,000 120,000 As above

Tobruk NOC 20,000 20,000 Operational

Marsa al-Brega

NOC 10,000 10,000 Under repair; end 2011 recommissioning

Sarir NOC 10,000 10,000 Operational

Petrochemicals

Location/plant Capacity (t/y)

RAS LANUF

Ethylene 330,000

Propylene 170,000

Mixed C4s 130,000

Pyrolysis gasoline 325,000

LLDPE 80,000

HDPE 80,000

MARSA AL-BREGA

Ammonia 700,000

Urea 900,000

ABU KAMMASH

Ethylene dichloride 104,000

Vinyl chloride monomer 60,000

Polyvinyl chloride 60,000

pipeline to the 20,000-b/d Tobruk refin-ery, which is also operated by Agoco. The terminal and refinery are both fed by oil from the Sarir field. The terminal exported 51,000 b/d of oil on average in both December 2010 and January 2011.

SarirThe only major downstream facility in Libya not to be located along the country’s coastline is the 10,000-b/d Sarir refinery, which sits alongside Agoco’s main pro-duction facilities at the Sarir oil field.



“In 2004, the Libyan government moved to attract [foreign] investors to the country”

Pre-2011 downstream deals and plans

Following the lifting of international sanctions in 2004, the government made moves to attract international investors to the country to help kick-start downstream projects and bring in key technologies, which had been, in many cases, unavail-able for decades.

However, only four major development deals were signed with Dow Chemical, Yara International, Dubai’s Al-Ghurair Group and Shell. As of 2010, talks were also ongoing to turn Ras Lanuf and Marsa al-Brega into energy cities – giant indus-trial hubs – at a total cost of $54bn.

The Dow Chemical deal was first mooted in April 2007, when Dow and NOC issued a joint statement announcing their plans to form a joint venture company to operate and expand the Ras Lanuf petro-chemicals complex. The plan called for the upgrade of the existing cracker and the addition of new butadiene, butene, methyl teritiary butyl ether (MTBE) and teryl-amyl methyl ether (TAME) units at a projected cost of $2.5-3bn.

However, Dow is understood to have pulled out of the deal during the 2008-09 global financial crisis, when it was suffering from severe financial strain due to its $15.3bn takeover of another

chemicals company, the US’ Rohm & Haas.

The Yara International deal was formally completed in February 2009, having been in the works since 2007. Under the terms of the deal, Yara set up a new com-pany, Lifeco, along with NOC and the Libyan Investment Authority to operate, renovate and upgrade the Marsa al-Brega fertiliser complex. The upgrade pro-gramme called for a 25 per cent output increase at the Lifeco facilities, which have a nameplate capacity of 700,000 t/y of ammonia and 900,000 t/y of urea. The budget for the scheme, which was at the planning stage at the end of 2010, was about $2bn.

The existing Lifeco facilities were shut down in February 2011, with Yara pulling its international staff from the country at the same time. Workers were returning to the facilities in September, with pro-duction start-up scheduled for the end of the year.



The Shell deal with NOC was one of the first to be made in Libya after the country started to open up in 2004, with an initial heads of agreement signed in March of that year and further endorsed in April 2005.

The agreement called for Shell to cooper-ate with NOC and SOC in rejuvenating and upgrading NOC’s LNG facilities at Marsa al-Brega. The plan aimed to boost production capacity from 0.7 million t/y to 3.2 million t/y at a cost of up to $450m. It included an exploration and production sharing agreement for five new blocks, which Shell hoped to discover gas in. A clause in the deal called for the construc-tion of a new LNG plant at Marsa al-Brega, should a major new gas find be made; in December 2010, Shell said that it was appraising a gas find in the Sirte basin.

However, progress on even the LNG plant upgrade was slow. The partners tendered the engineering procurement and con-struction deal for the upgrade in 2009, but only the UK’s Petrofac submitted a final bid for the project. In 2010, contrac-tors were told that SOC and Shell planned to retender the deal, with a new tender eventually being launched in 2011. Final bids for the deal were due to be submitted in the first quarter of 2012, but the project was on hold as of the end of 2011.

In March 2009, NOC signed an agreement with Al-Ghurair Group for a $2bn devel-

In July 2007, the Economic & Social Development Fund (ESDF) commissioned US engineering major Fluor Corporation to develop a masterplan for the creation of two giant energy cities at Marsa al-Brega and Ras Lanuf.

Unveiled in October 2009 by the ESDF and the country’s Economic Development Board, the Fluor plan set out a 15-year timetable for a total overhaul of all of the existing oil, gas and petrochemicals facili-ties at the two cities, along with plans for the development of new power, refining, petrochemicals and LNG export facilities, and a huge tourist resort.

At Ras Lanuf, Fluor outlined plans for a 50 per cent increase in cracking capac-ity, a 25 per cent boost to the existing polyethylene plant, new LNG facilities, an aluminium plant and a new power plant. At Marsa al-Brega, the plans called for a 25 per cent increase in fertiliser produc-tion, a tripling of LNG capacity, a new PVC pipe plant, new port facilities and a new power station, along with a five-star hotel resort.

The plans, put on hold in early 2011, had attracted the interest of major interna-tional oil and petrochemicals firms includ-ing BP and Dow Chemical.

Energy cities at Marsa al-Brega and Ras Lanuf

opment of the Ras Lanuf refinery through a new joint venture company, Libyan Emirati Refining Company. As of early 2011, little progress had been made on the upgrade project, although the joint venture deal had been concluded. The refinery was closed in February 2011 as the civil war broke out.

In 2008, a Canadian engineering com-pany, Winfield Energy, announced that the Libyan government had approved its application to build, own and operate a new 300,000-b/d refinery at Ras Lanuf. The company said in May 2010 that the agreement still stood, although no work

had been done on the project as of early 2011. It is thought that the scheme is unlikely to progress.

Other refinery upgrade projects were planned by NOC at Tobruk and Azzawiya, with the state oil firm in talks with poten-tial partners in late 2010. NOC also planned to build a new 220,000-b/d refin-ery at Sebha, in the southwest of the country, to help ease domestic supply issues in more remote parts of Libya.



Since its formation in November 1970, state energy firm National Oil Corporation (NOC) has dominated all aspects of Lib-ya’s hydrocarbons sector, controlling strategic long-term planning, a percentage of all exploration and production conces-sions and almost all of the country’s downstream assets. NOC has also been the country’s main marketer of oil since its inception and has its own oil field drilling and service companies, which are widely used across the country.

Frustrated by its apparent lack of progress, the government went as far as to shut down the Energy Ministry in 2000 and hand over all of its responsibilities to NOC, although this decision was reversed in 2004. In 2006, then-Prime Minister Shokri Ghanem was appointed to the post of NOC chairman and was given responsi-bility for all aspects of the energy industry, along with the Energy Ministry that now came under the purview of NOC.

In September 2009, Ghanem resigned as energy chief because of tensions within the leadership and was replaced by his deputy, while a new supreme energy council was set up. However, Ghanem returned to the post a month later.

Industry structure and future prospects

At the beginning of 2011, the industry was effectively centred around NOC, its subsidiaries and a series of joint venture companies. Owned by NOC and interna-tional oil companies (IOCs), the ventures operated concessions under the terms of exploration and production sharing agree-ment (EPSA) licences.

As of late 2011, the National Transitional Council (NTC) had kept this structure more or less intact and had in fact retained many existing employees of state firms, with the exception of a few top executives replaced. Ghanem, who is now based in Dubai, was replaced by Nouri Berouin, a former top Arabian Gulf Oil Company (Agoco) executive, whom the NTC appointed in late August 2011. Until that point, a firm set up by the NTC, Lib-

“By 2006, the Energy Ministry had been handed over to the National Oil Corporation”



“It is unlikely that any radical changes will be made to the oil and gas industry structure”

yan Oil Company, had been co-ordinating oil and gas operations and marketing from assets under NTC control.

In May 2011, the NTC appointed a new Oil & Gas Minister, Ali Abdussallam Tarhouni, the former US-based economist. He was replaced in November 2011 by Abdulrah-man bin Yazza, a former chairman of Eni’s local operations.

Exactly what shape the industry will take in the future remains to be seen, with the country’s main cash cow a source of fierce debate between NTC members, NOC com-pany executives and the wider Libyan pop-ulation. NOC was seen as more business friendly under Ghanem than in the past and less subject to the capricious whims of the Gaddafi regime, with international oil executives welcoming the chairman’s plans to turn the firm into a more effective insti-tution modelled on quasi-independent companies like Saudi Aramco.

However, many NTC members are not keen to see NOC enjoy the kind of auton-omy it enjoyed in the past. They foresee a more central planning role for the Oil & Gas Ministry or its successors, with state firms like Agoco and Sirte Oil Company (SOC) acting independently from NOC.

In the near term, it is unlikely that any radical changes will be made to the indus-try structure, with the NTC focused on ramping up oil production, generating

healthy revenues and stabilising the coun-try in the run-up to national elections in 2012. Executives with ties to NTC mem-bers say that ministers are unlikely to want to make any big decisions before elections are held, lest they be accused of acting without oversight.

However, it is likely that the Oil & Gas Ministry will begin investigating the terms and tendering process for major EPSAs and other contracts awarded under the Gaddafi regime. Officials have been at pains to make clear that contracts awarded within the bounds of existing laws will be honoured, but are likely to be keen to make an example of any company proved to have acted improperly. Given the already relatively harsh terms of EPSA IV and the need to attract further invest-ment in the hydrocarbons sector, it is not thought likely that any new administra-tion will seek to introduce even stricter terms. Indeed, it may well be the case that EPSA IV is revised to make it more friendly for new concession agreements.

State-run companies

Arabian Gulf Oil Company (Agoco)Agoco is the successor to Arabian Gulf Exploration Company (Ageco), set up in 1971 to take over part of UK-based BP’s stake in Libya’s oil and gas industry. In 1979, Agoco assumed assets previously held by BP and the US-based firms of Nel-son Bunker Hunt, Chevron and Texaco.

Agoco acts as both an exploration and production company. It is largely focused on fields in the Sirte basin, the most important of which are Sarir, Messla, Nafoora, Beda and Hamada. The company also operates the Tobruk refinery and export facilities and the Sarir refinery.

The company is Benghazi-based and was the first oil firm to fall into the hands of the NTC. It started producing oil for export in late August and early September 2011.Key contact: Ahmed Majbri, ChairmanTelephone: (00218) (61) 222 90064Website: www.agoco.com.ly

Azzawiya Oil Refining CompanyAzzawiya Oil Refining Company (ARC) was founded in 1976 to operate the NOC-owned Azzawiya refinery. The company also manages the Azzawiya oil export terminal.

In 2009 and 2010, NOC started the search for a partner to participate in the kind of deal it had pioneered at its Ras Lanuf refining facilities: taking an equity stake in the complex in exchange for a promise to fund an upgrade and improve management.

The refinery was briefly shut as the civil war broke out in February 2011, but was restarted the next month. In August 2011, the refinery became a focal point for fight-ing between the NTC and the Gaddafi regime, and was once again shut when the



NTC took control. It was restarted in early September 2011 and has been running more or less continuously since then, largely working from existing stores of oil.Key contact: Nouri Berriuen, NOC Chair-man Telephone: (00218) (23) 764 3500Website: www.noclibya.ly

Sirte Oil Company (SOC)Marsa al-Brega-based SOC was set up in 1981 to take over Esso Standard Libya, a subsidiary of the US’ ExxonMobil Corpo-ration, which quit the country rather than agree to new licensing terms on its con-cessions. In 1986, it assumed the assets of another US firm, Grace Petroleum, after it was forced to relinquish its assets in the country under new US sanctions.

Until 2005, SOC was in charge of the fer-tiliser complex now operated by Libyan Norwegian Fertiliser Company. It contin-ues to operate the Sirte oil refinery, the Marsa al-Brega export terminal and the Marsa al-Brega liquefied natural gas (LNG) plant, along with a number of oil and gas fields. These include the Nasser, Graguba, Jabal, Wadi, Ralah, Arshad, Ain Jerbi and Al-Wafa oil fields and the Hateiba, Sahil, Assamoud, Meghil, Sorrah and Attahaddy gas fields.Key contact: Nouri Berriuen, NOC Chair-man Telephone: (00218) (21) 361 0376Website: www.soclibya.com

RascoRas Lanuf Oil & Gas Processing Company (Rasco) is the main operator of the Ras Lanuf refinery, petrochemicals complex and export terminal. The company was founded in 1983, in preparation for the commissioning of the Ras Lanuf refinery, and subsequently took on the task of run-ning the adjacent petrochemicals facili-ties, which were built in the 1990s by mainly Yugoslavian contractors.

In 2008, management of the Ras Lanuf refinery was handed over to Libyan Emir-ates Refinery Company (Lerco), a joint venture of NOC and Dubai’s Al-Ghurair Group, with Rasco continuing to act as de facto operator of the facility.

NOC also planned to set up a new joint venture company to run the Ras Lanuf petrochemicals facility, but these plans fell through, when the deal to develop the complex with the US’ Dow Chemical was cancelled.Key contact: Mohamed Eltrshani Telephone: (00218) (54) 384 3450Website: www.lercorefinery.com

Joint ventures

Zueitina Oil CompanyZueitina Oil Company was founded in 1986 to take over the assets of the US’ Occidental Petroleum, which had been working in Libya since 1966, but had to abandon its concessions due to US sanctions.



“Mellitah Oil & Gas is a 50:50 joint venture of Italy’s Eni and National Oil Corporation”

In 2008, a deal was struck under the terms of the EPSA IV licence for Occiden-tal to return to the country as a partner in Zueitina, with a 12.25 per cent share, while Austria’s OMV took a 4.75 per cent stake, and NOC holding on to the remain-ing 83 per cent.

The company runs the Zueitina oil termi-nal and operates the Intisar oil field, along with some smaller fields, including Zella, Sabah and Fida. Total output in 2010 was about 40,000 b/d. The company is head-quartered in Tripoli.Telephone: (00218) (21) 338 01114Website: www.zueitina.com.ly

Mellitah Oil & GasMellitah Oil & Gas, a 50:50 joint venture of Italy’s Eni and NOC, was set up in 2008 to take on responsibility for all of the pair’s joint venture activities, which include the NC-118 oil field and the Wafa gas field in the Ghadames basin, the Ele-phant field in the Murzuq basin, and the Rimal, Khatib and Bu Attifel fields in the Sirte basin. The company also operates the offshore Bouri and Bahr Essalam oil and gas fields, and the main processing and distribution facilities at Mellitah.Key contact: Najmi Krayem, ChairmanTelephone: (00218) (21) 335 0890Website: www.mellitahog.ly

Greenstream BV Greenstream is another 50:50 Eni/NOC joint venture. It owns and operates the

main Mellitah compression facilities and the Greenstream pipeline, which trans-ports the gas produced by Mellitah Oil & Gas to Sicily.

Waha Oil CompanyWaha Oil Company (WOC) was set up in 1986 to take over the assets relinquished by the Oasis consortium, which was made up of three US companies under the sanctions of that year – ConocoPhillips, Marathon and Amerada Hess.

In January 2006, the three former partners negotiated shares in the company. It is now jointly owned by NOC (59.2 per cent), ConocoPhillips (16.3 per cent), Marathon Oil (16.3 per cent) and Hess (8.2 per cent). WOC operates the Al-Waha, Samah, Dahra, and Gialo fields and asso-ciated facilities, along with the El-Sider export terminal. The company also runs the pipeline network that links the fields with El-Sider and carries crude from fields operated by Germany’s Wintershall and France’s Total.Key contact: Bashir Elshahab, ChairmanTelephone: (00218) (21) 333 1116Website: www.wahaoil.net

Harouge Oil OperationsHarouge Oil Operations, formerly Veba Oil Operations, is a 50:50 joint venture of Canada’s PetroCanada and NOC. The company was formed in 1987 to take over the US’ Mobil Oil’s share of a series of oil

and gas concessions, which it had oper-ated with Germany’s Gelsenberg, later renamed Veba Oil Libya, since the 1950s. Following Mobil’s departure, Veba Oil Operations was formed as a joint venture between NOC and Veba.

In 2002, PetroCanada took over Veba Oil’s share of the company and in 2008, it signed six new EPSA agreements with Veba Operations, now renamed Harouge Oil Operations, acting as developer on the agreed areas.

Harouge operates the Amal, Farig, Ghani, Tibisti and El-Naga fields, along with the Ras Lanuf export terminal and asso-ciated facilities.Key contact: Abdulwahab Elnaami, Chair-manTelephone: (00218) (21) 333 0081Website: www.vebalibya.com

Akakus Petroleum OperationsAkakus Petroleum Operations is a 50:50 joint venture of Spain’s Repsol and NOC, which, until 2007, was known as Repsol Oil Operations. The company’s primary role is operating Repsol-led concessions, including the Sharara oil field in the Murzuq basin, the N-186 concession in the Ghadames basin and the nearby NC-190 concession.

Akakus also oversees Repsol’s explora-tion activities in the country and oper-ates the Sharara-Hamada pipeline.



Repsol Oil Operations Company was set up when it won its first EPSA deals in Libya in 1994. It changed its name to Akakus Oil Operations in 2007, as part of negotiations around new concession licences and a reworking of existing con-cession terms under the EPSA IV licens-ing terms.Contact: Abdulmajid Shah, ChairmanTelephone: (00218) (21) 480 263039Website: http://www.akakusoil.com

Mabruk Oil OperationsUntil 2007, Mabruk Oil Operations, a 50:50 joint venture operating company owned by NOC and Total, was known as Total Oil Operations. The company’s name was changed during negotiations over new licences and updated terms for existing concessions.

Its main activities are centred around the Mabruk oil field in the C17 concession of the Sirte basin, in which NOC holds a 50 per cent stake and Total and Norway’s Statoil hold respective shares of 37.5 and 12.5 per cent. It also operates the offshore Al-Jawf field in western Libya, in which NOC holds a 50 per cent stake, Total 37.5 per cent and Germany’s Wintershall a 12.5 per cent stake.Key contact: Ahmed AbulsayenTelephone: (00218) (21) 335 0401Website: http://www.cptlibya.com



By and large, most of the civil war dam-age to Libya’s oil and gas infrastructure was fairly superficial, with most firms working in the country complaining more about the looting and destruction of accommodation and offices, rather than significant damage to major produc-tion facilities.

However, oil executives in the country were concerned about two key issues: the speed with which many oil fields had been shut down and the danger of mines left by pro-Gaddafi forces.

The first issue is one that executives say will take months, if not years, to fully gauge, with Libya’s older fields already in need of enhanced oil recovery (EOR) tech-niques before the civil war. The second is most likely to be a problem for major inter-national oil and engineering firms sending workers into the country. National Transi-tional Council (NTC) ministers remain concerned that both groups might hold back because of safety concerns.

Nevertheless, oil output was recovering rapidly in the final quarter of 2011. Pro-duction had reached about 570,000 barrels a day (b/d) in the first week of November;

The status of existing production facilities

a month later, local officials said it was up to 840,000 b/d. What follows is a detailed breakdown of the status of the country’s key oil and gas infrastructure.

West Libya: Bouri, Bahr Essalam, Abu Kammash, Mellitah, Azzawiya, Ghadames and Murzuq basins

Bouri/Bahr Essalam fieldsThe offshore Bouri and Bahr Essalam fields, operated by Mellitah Oil & Gas (MOG), were shut down in February 2011, with Italian shareholder Eni con-cerned about them sustaining damage. According to Eni, the facilities sustained no damage whatsoever. MOG started working towards restoring production at the Bahr Essalam field in early November,

“Libya’s older oil fields were in need of enhanced recovery methods even before the civil war began”



“The Greenstream pipeline required light repairs, but was operational by late October”

targeting output of 380 million cubic feet a day (cf/d) of gas by the end of the month, with production from the Bouri field set to begin at the same time.

Production at the Mabruk-operated Al-Jawf field was restarted in late September and by early November had reached about 45,000 b/d.

Mellitah complexThe Mellitah complex was the scene of some fighting during the civil war and is understood to have sustained some dam-age, most of it superficial. The Green-stream pipeline required light repairs, but was operational by late October and offi-cials at Eni remained upbeat about the facilities’ capability to cope with increas-ing production over the coming months.

Azzawiya facilitiesThe Azzawiya refinery and export complex, run by Azzawiya oil Refining Company (ARC), was the scene of heavy fighting between NTC troops and Gaddafi loyalists in August 2011. The Azzawiya facilities were shut down after the NTC took control of the area and were not reopened until September, when the National Oil Corporation (NOC) reported that the refinery was operating at about half of its 120,000-b/d capacity. By early November, the plant was processing about 90,000 b/d and was operating at full capacity a month later. All its output was going to the local market.

Wafa fieldThe Wafa field, which supplies the bulk of the gas to the Greenstream pipeline, also suffered relatively little damage during fighting and the main pipeline linking the complex with Mellitah just required basic maintenance. Production started at Wafa in mid-October. Eni said in early Novem-ber that it could technically return to full pre-war production levels at the field, but that it was only pumping enough gas to meet domestic fuel and electricity needs – about 50,000 barrels of oil equivalent a day (boe/d).

Hamada/Al-Hamra systemThe Hamada/Al-Hamra system, operated by Arabian Gulf Oil Company (Agoco) also escaped major damage, although the state-run firm confirmed in late October that it was yet to restart production at its Ghadames facilities because of issues related to the speed and manner in which they were shut down. Pre-war output was about 12,500 b/d.

Sharara fieldThe Sharara field, operated by Akakus Oil Operations, was initially thought to have sustained considerable damage during the civil war, with sustained fighting occur-ring in the vicinity of the main produc-tion, processing and distribution facili-ties. However, damage was limited to living quarters and offices, with only light repairs required to key equipment and the pipeline linking the field with Hamada.

Spain’s Repsol restarted production at the field on 25 October and targeted pro-duction of about 10,000 b/d by the end of the month. In early November, former oil & gas minister Ali Abdussallam Tarhouni claimed that output from the field had reached 90,000 b/d, although local executives disputed this, saying that the figure was closer to 60,000-70,000 b/d. Full 2010 output of 260,000 b/d was not expected until the first half of 2012.

Elephant fieldThe Elephant field facilities, operated by MOG, were among the most severely affected by the civil war, with Eni initially reporting major damage to the infrastruc-ture. The pipeline linking the field with Mellitah also came under heavy attack.

However, production resumed in mid-November and was running at 40,000 b/d by early December, well down on the late 2010 average of 127,000 b/d.

NC-186Production from fields at the Akakus-operated NC-186 concession restarted in November. Despite some damage to pipe-line infrastructure, output ramped up swiftly and had reached 200,000 b/d by early December.



Central Libya: The Sirte basin, El-Sider, Ras Lanuf, Marsa al-Brega and Zueitina

Refineries and export terminals

El-Sider terminalA major roadblock to boosting Libyan oil exports after the war was the sustained damage caused to the key El-Sider oil ter-minal, which saw almost all facilities in need of repair. Repairs started in October, with local oil service firms taking on the majority of the work. Exports from the ter-minal began in December, although it was expected to be a year before the facility was fully repaired.

Ras Lanuf facilitiesThe Ras Lanuf refinery was the site of sev-eral pitched battles between Gaddafi loy-alists and NTC troops. However, the plant was closed in March, with Ras Lanuf Oil & Gas Processing Company (Rasco) employees trying to minimise the poten-tial for damage and returning to the site to undertake repairs whenever necessary.

Production was expected to resume in December. However, full commissioning of the 220,000-b/d refinery is not likely to take place before the first half of 2012.

The Rasco-operated petrochemicals facili-ties were not as badly affected by the fighting as the refinery itself, but will not return to full production until the refinery

is back online and domestic gasoline needs have been met.

Marsa al-Brega facilitiesThe Marsa al-Brega terminal suffered con-siderable damage during the war and as of early November was still under repair, with the facilities not expected to be in use until December. Full repair of the facilities is likely to run well into 2012, according to industry sources. Key repairs were also delayed by striking workers at Waha Oil Company (WOC), the terminal’s operator, who demanded that the compa-ny’s chairman be sacked for co-operation with the Gaddafi regime.

The Libyan Norwegian Fertiliser Company complex at Marsa al-Brega did not suffer severe damages and Norway’s Yara Inter-national began to assess repair needs at the end of October, while targeting a restart for the plant by year end.

Zueitina terminalThe Zueitina terminal suffered the least damage of all the Gulf of Sirte oil export terminals, having been taken over by the NTC in March, at the start of the war, with enough repairs being made for oil to be loaded at the facilities by mid-June.

Waha Oil Company facilitiesWOC operates the Al-Waha, Samah, Dahra and Gialo oil fields, which are connected to its El-Sider export terminal by a 550-kilometre pipeline that it oper-



“The Zueitina terminal suffered the least damage of all the Gulf of Sirte oil export terminals”

ates. The pipeline required some repairs after the war, but is understood to be in good condition. The Dahra and Samah fields were the first to restart and were jointly producing 16,000 b/d by early December. Production was also about to start at the Gialo field, which had mainly suffered damage to its accommodation and administrative buildings. In contrast, the Al-Waha field required extensive demining, according to WOC officials.

The strike by company employees demanding that the chairman be sacked for

collaboration with the Gaddafi regime was finally resolved in mid-November. This allowed production to resume at the first two fields.

Mabruk Oil Operations facilitiesThe C-17 (Mabruk) concession, which is run by Mabruk Oil Operations, was una-ble to start producing until the WOC dis-pute was resolved, as exports pass through WOC pipelines. However, by early December, Mabruk production had risen to 45,000 b/d. Its facilities were largely unaffected by the war, allowing production to resume quickly.

Harouge Oil Operations facilitiesThe Harouge oil fields are connected to two pipeline systems, with output from the El-Naga, Ghani and Al-Jufra fields linked to the WOC line to El-Sider, while the Tibisti field is connected by a separate line, run by Sirte Oil Company (SOC), to El-Sider.

Harouge started repairs to the fields in early October and loaded the first tanker of oil for export in late October. The fields had suffered varying degrees of damage, largely to administrative and accommoda-tion buildings, which Harouge estimated



“The Sarir and Tobruk refineries were both largely unscathed by the civil war ”

would cost about $30m to repair. Produc-tion was about 30,000 b/d in early Novem-ber and Harouge was confident it could bring output up to the 2010 levels of 80,000 b/d-plus by the end of the year.

Sirte Oil Company facilitiesThe SOC pipeline to El-Sider carries oil from its Zaggut and Graguba fields. The Graguba field is linked in to another pipe-line system, which also transfers oil from the Nasser and Jabal fields to Marsa al-Brega. In total, fields operated by SOC produced 100,000 b/d in 2010.

SOC’s offices and administrative head-quarters in Marsa al-Brega were among the most affected by the fighting. The company has had the most difficulty in restarting oil production due to a lack of accommodation or buildings at its fields, heavy mining around some facilities and a lack of capacity. Total output from the company’s fields was estimated in early November at about 20,000 b/d.

Rimal-Intisar-Zueitina systemMOG was back at work at the Rimal and Bu Attifel fields in October and had reportedly boosted production at the fields – 103,000 b/d in total before the war – to about 70,000 b/d by late August, after finding little damage at either field.

Zueitina Oil, which uses the same pipe-line as MOG to transport oil to its Zuei-tina oil terminal, also returned to produc-

tion in October. As of early November, the company was pumping as much as 30,000 b/d from the Intisar field and undisclosed volumes of gas.

Arabian Gulf Oil Company (Agoco) facilitiesAgoco is the biggest producer in Libya and was the first to be run by the NTC. It operates the giant Sarir field, which produced 200,000 b/d in 2010. Sarir is directly connected to the Marsa al-Hariga terminal by a dedicated pipeline. Its other main fields are Messla, Aguila and Nafoora, which are part of the network of linked facilities that are connected to the Ras Lanuf export terminal.

The Sarir field was the scene of some fighting early in the war, but by Septem-ber, Agoco had made significant repairs to both the field and the pipeline connecting it with Tobruk, claiming that production was about 160,000 b/d. The output from Sarir was being used as a feedstock for

both the Sarir and Tobruk refineries, which have a combined capacity of 30,000 b/d and were both largely unscathed by the war. Meanwhile, the Marsa al-Hariga terminal was operating at full capacity in early November.

The Messla and Aguila/Nafoora fields were more affected by the fighting, but came on stream in early October, adding some 80,000-90,000 b/d of production. As of early December, Agoco’s total output was about 280,000 b/d.

Two more fields are connected to the Agoco-Ras Lanuf network: Amal and Al-Sarah, operated by Harouge and Ger-many’s Wintershall. Wintershall reported in mid-October that it was producing about 20,000 b/d from Al-Sarah, while Harouge was producing a similar volume.



Output and status of major oil and gas facilities, November 2011

Basin Operator Shareholders (%)Production,

2010 (kb/d)Production halted (2011)

Production restarted (2011)

Estimated output, October 2011 [kb/d)/Damage status

Al-Jawf Pelagian Murzuq NOC (50), Total (37.5), Wintershall (12.5) 45 March September 40

Bouri Pelagian MOG NOC (50), Eni (50) 44.5 February Mid-November (target) 0/MOG working towards mid-November start-up

Hamada/Al-Hamra system

Ghadames Agoco NOC (100) 12.5 March na 0/Start-up issues causing delays

Sharara Murzuq AOO NOC, Repsol, OMV, Total 290 February October 90

Elephant (El-Feel) Murzuq MOG NOC (33.33), KNOC (33.33), Eni (33.33) 127 March na (November/December) 0/Severe damage to infrastructure, pipelines

NC-186 Murzuq AOO NOC, Repsol, Total, OMV, Statoil 80 February na (November/December) na

Al-Waha Sirte WOC NOC (59.2), ConocoPhillips (16.3), Marathon Oil (16.3), Amerada Hess (8.2)

170 March na 0/Damage to accommodation, worries over mines

Samah Sirte WOC NOC (50.2), ConocoPhillips (16.3), Marathon Oil (16.3), Amerada Hess (8.2)

25 February na 0/Strike action

Dahra Sirte WOC NOC (50.2), ConocoPhillips (16.3), Marathon Oil (16.3), Amerada Hess (8.2)

25 February na 0/Strike action

Gialo Sirte WOC NOC (50.2), ConocoPhillips (16.3), Marathon Oil (16.3), Amerada Hess (8.2)

140 February na 0/Strike action (accommodation disruption)

Mabruk (C-17) Sirte Total NOC (50), Total (37.5), Statoil (12.5) 20 February na 0/Cannot be started until WOC facilities are recommissioned

Ghani Sirte Harouge Oil Operations

NOC (50), PetroCanada (50) 20 March October 10

Al-Jufra Sirte Harouge Oil Operations


Tibisti Sirte Harouge Oil Operations

NOC (50), PetroCanada (50) 20 March October 0/Damage to accommodation, worries over mines

El-Naga Sirte Harouge Oil Operations


Graguba Sirte SOC NOC (100) na March Unknown General concerns over SOC capacity remained

Nasser Sirte SOC NOC (100) na March Unknown na

Lehib Dor Marada Sirte SOC NOC (100) na March Unknown na

Jabal Sirte SOC NOC (100) na March Unknown na



Output and status of major oil and gas facilities, November 2011 (Continued)

Basin Operator Shareholders (%)Production,

2010 (kb/d)Production halted (2011)

Production restarted (2011)

Estimated output, October 2011 (kb/d)/Damage status

Ralah Sirte SOC NOC (100) na March Unknown na

Arshad Sirte SOC NOC (100) na March Unknown na

Ain Jerbi Sirte SOC NOC (100) na March Unknown na

Wafa Sirte SOC NOC (100) 100 March Unknown 20

Bu Attifel Sirte MOG NOC (50), Eni (50) 73.4 February October 50

Rimal Sirte MOG NOC (50), Eni (50) 30 February October 20

Intisar Sirte Zueitina Oil NOC (83), Occidental (12.25), OMV (4.75) 40 February October 30

Sarir Sirte Agoco NOC 200 February August 160

Nafoora Sirte Agoco NOC 140 February August 50

Messla Sirte Agoco NOC 55 February August 30

Al-Sarah Sirte Wintershall NOC (50), Wintershall (25), Gazprom (25) 90 February October 30

Amal Sirte Harouge Oil Operations

NOC (50), PetroCanada (50) 30 February October 20

kb/d=Thousand barrels a day; MOG=Mellitah Oil & Gas; AOO=Akakus Oil Operations; NOC=National Oil Corporation; Agoco=Arabian Gulf Oil Company; KNOC=Korean National Oil Corporation; WOC=Waha Oil Company; SOC=Sirte Oil Company; na=Not available. Source: MEED Insight



The opening up of the Libyan economy in 2004 revived hopes for a huge boost in production in a country that has consist-ently underachieved as a producer of oil and gas.

Initially, the signs were promising. Between 2004 and 2008, National Oil Corporation (NOC) closed a total of 57 exploration and production sharing agreements (EPSAs) under the terms of its EPSA IV contracts, bringing the total number of oil and gas concessions in the country, including those held solely by NOC and its affiliates, to 228.

But despite the sheer number of contracts signed after 2004, all of which required the winning IOCs to commit to a large minimum spend on exploration activities and to pay significant signing on bonuses running into hundreds of millions of dol-lars, oil output was not increased at the pace that many observers and industry insiders had expected.

IOC executives blamed this on a combina-tion of poor exploration results, stifling bureaucracy and tensions between the government of the late Muammar Gaddafi, NOC and the IOCs.

The future for Libya’s EPSA holders

“Between 2004 and 2008, National Oil Corporation closed 57 production sharing agreements”

*=Includes oil firms no longer active in Libya; EPSA=Exploration and production sharing agreement; E&P=Exploration and production. Source: MEED Insight

International firms that have signed EPSAs*

Company

PetroCanada

Occidental (Oxy)

Eni

Woodside Petroleum

Royal Dutch Shell

Repsol

RWE

Total

Wintershall (BASF)

Tatneft

Nimir Petroleum

Inpex Holdings

StatoilHydro

ExxonMobil

BP

Turkiye Petroleum

ONGC

International firms that have signed EPSAs* (Continued)

Company

Sonatrach

Oil India

BG

Pertamina

Nippon Oil Corporation

PGNIG

Chinese Petroleum Company (CPC)

China National Petroleum Corporation

Verenex

Chevron

Petrobras

Hess

Boco

OMV

Algerian-Libyan E&P

Joint Operating Company



“Firms whose governments had abstained from working with the NTC might suffer”

Interest in the four post-sanctions bid rounds also waned. In the first round, which ran from October 2004 to January 2005, 15 exploration and production areas were offered. About 163 companies applied to bid for the contracts, 63 were approved and all of the concessions – nine onshore and six offshore – were awarded.

In the second bid round, held in October 2005, 26 areas were bid by 48 companies, many of which were smaller independent and Asian firms. However, during the third bid round, 14 areas were offered and 47 firms were prequalified to bid, but only 10 deals were completed, with more non-Western companies, including Russia’s

companies willing to earn lower margins, or with strategic interests in capturing a share of production at a national level, were more successful in later bid rounds.

With a new administration in Tripoli, there has again been considerable speculation over new opportunities for IOCs, rewards for firms which lent early support to the National Transitional Council (NTC) and penalties for those whose governments were not as supportive of Gaddafi’s ouster.

The speculation was fuelled by several reports out of Libya. In an August 2011 interview with Reuters, an Arabian Gulf Oil Company (Agoco) official said that the firm had no issue with Western firms whose governments had recognised the NTC and which had agreed early on to work with the rebel government, but that those firms whose governments had abstained, namely Russian, Chinese and Brazilian firms, might suffer.

This was followed in late October by NOC releasing details of deals signed and pro-posed with IOCs for oil supplies and help in restarting oil and gas production. Swit-zerland’s Vitol was a major supplier of fuel to the NTC, while Repsol offered help in restarting production.

Tripoli has had to adopt a pragmatic approach, with the need for a speedy resumption of production – and, with it, an inflow of revenues – overriding politi-

EPSA=Exploration and production sharing agreement; kb/d=Thousand barrels a day. Source: BP Statistical Review

EPSA contract holders

Year Production (kb/d)

2000 1,475

2001 1,427

2002 1,375

2003 1,485

2004 1,623

2005 1,745

2006 1,815

2007 1,820

2008 1,820

2009 1,652

2010 1,659

Gazprom and Tatneft and China National Petroleum Corporation (CNPC), winning development contracts. When the fourth, gas-focused round was held in December 2007, only 13 companies out of the 54 qualified bid and only six out of the 12 contracts were awarded.

At the same time, NOC, headed by former oil & gas minister Shokri Ghanem, attempted to renegotiate all existing pro-duction sharing agreements under the terms of EPSA IV. In 2009, France’s Total and its partners in Libya – Germany’s Wintershall and Norway’s Statoil – agreed to the new terms, which reduced their share of production at existing conces-sions from 50 per cent of oil output to 27 per cent.

Under the new deals, the companies also agreed to take 40 per cent of gas output from their concessions, falling to 30 per cent within five years, rather than the initially agreed 50 per cent. The deal followed a similar renegotiation between Italy’s Eni and NOC in 2007, which brought all of the firm’s contracts in line with EPSA IV. This was followed by a reworking of Spanish firm Repsol’s concession agreements in Libya.

Coupled with higher signing-on fees and a commitment to take on all development costs, rather than sharing them with NOC, the new deals were becoming less attrac-tive to IOCs. This largely explains why



cal concerns. The NTC has said that it is committed to upholding all contracts that were signed in line with existing Libyan laws, although it will investigate existing EPSA deals for any improprieties in the way they were awarded. This, executives say, includes all contracts signed with Russian, Brazilian and Chinese firms, although the council does not want to alienate potential economic partners or future oil consumers.

The chances of contract renegotiations or new bid rounds before late 2013 are extremely low. The NTC is by nature a transitional council and has been cautious not to make major decisions that could come under scrutiny after a permanent government has been elected through a national vote in 2012. As a result, new deals are unlikely to be struck until a democrati-cally elected oil minister has been put in place and has had time to work on a long-term strategy, new petroleum laws or concession terms.

NOC’s core focus is restoring oil output – the country’s chief source of revenue – by working with existing partners. The state oil company hopes to reach pre-conflict production of 1.6m b/d by the end of 2012. IOCs are unlikely to resume signifi-cant exploration operations until they can assess the security situation, following the 2012 elections. They will also need time to build new relationships with the

future oil & gas ministry, which may well reduce the role of NOC.

A less idiosyncratic government can only be a good thing for IOCs and if the NTC acts on its promise to improve transpar-ency and economic freedoms, the business environment could be signifi-cantly improved. However, a clear picture of the structure of the industry – and an opportunity for new oil and gas deals – is unlikely to emerge until 2014-15.

“National Oil Corporation’s focus is restoring oil output by working with existing partners”



Power supplies were seriously dis-rupted during the civil war, with

lengthy blackouts being experienced in the major cities of Tripoli, Misurata, Sirte and Benghazi. In most cases, disruptions were caused not by damage to power plants, but by a lack of oil and gas feed-stock or network issues. Feedstock avail-ability will be crucial in determining how quickly power capacity and supplies can be restored to pre-2011 levels.

DemandPrior to 2011, Libya’s power sector experi-enced strong growth both in terms of peak power demand and installed capacity. In the decade up to 2010, power demand growth averaged 8-10 per cent a year and reached 5,759MW, an increase of 9 per cent over the 2009 figure.

The high growth was driven by a popula-tion that rose on average by 2.2 per cent a year and an economy that expanded by an

Power

“In the decade up to 2010, power demand growth averaged 8-10 per cent a year”

Peak power demand growth, 2000-10

Sources: Gecol, AUPTDE

(MW)

0

1000

2000

3000

4000

5000

6000

20032000

2006201

02008

2009

6,000

5,000

4,000

3,000

2,000

1,000

0



average of 7 per cent a year over the period. It was also due to a sharp rise in per capita electricity consumption. Between 2000 and 2007, per capita consumption climbed by 56 per cent to 4,158 kilowatt hours (kWh), which while being relatively low compared to the Gulf states, was high in relation to elsewhere in North Africa.

The increase in per capita consumption reflected: • a jump in installed generating capacity• the near completion of a long-running programme to connect the entire popula-tion to the network• rising living standards brought about by higher oil prices• Libya’s reintegration into the interna-tional community, which paved the way for increased foreign investment, new infrastructure projects and the rise of a middle class

An additional factor for the relatively high per capita consumption was low tar-

kWh=Kilowatt hours; $1=LD1.3; na=Not applicable. Source: Gecol

kWh=Kilowatt hours; $1=LD1.3. Source: Gecol

Residential power tariffs

Monthly consumption (kWh) Tariff (LD/kWh) Meter charge (LD)

1-1,000 0.02 0.05

1,001-1,400 0.03 na

1,400 and above 0.05 na

Non-residential power tariffs

Tariff (LD/kWh) Meter charge (LD)

Commercial 0.068 0.55

Agricultural (large) 0.032 0.2

Agricultural (small) 0.02 0.2

Heavy industry 0.042 0.5

Light industry 0.031 1

Light industry 0.031 1

“Between 2000 and 2007, per capita consumption climbed by 56 per cent to 4,158 kilowatt hours”



iffs. As in much of the Gulf, tariffs are set well below the cost of power production and transmission and, as a result, are heavily subsidised. This means there has been little incentive for consumers to conserve energy.

The existing tariff system is broken down by sector and for residences by band, based on usage. The residential tariff ranges from LD0.02 ($0.016) a kWh up to LD0.05 a kWh, excluding a LD0.05 meter charge. Non-residential tariffs are higher,

with commercial establishments paying a flat rate of LD0.068 a kWh. Prior to 2011, however, revenue collection was poor, resulting in many residential con-sumers effectively paying nothing for their electricity.

Compared to some Gulf states, the sources of power demand in Libya are relatively balanced. According to the latest figures from the General Electricity Company of Libya (Gecol), the residential and com-mercial sectors each accounted for 33 per

Installed generating capacity by technologyBreakdown of power demand by sector, 2008

1,74721

13

MW%

2,35533

4,24733

Source: AUPTDESource: Gecol

Gas turbineResidential

Commercial

Combined-cycle

Industrial

Steam turbine

Agriculture

cent of demand in 2008. Industrial users made up 21 per cent, with most of the demand coming from the oil and gas sec-tor and the Misurata steel complex, while agriculture accounted for the remaining 13 per cent.

CapacitySerious power shortages in 2004 prompted the government to invest heavily in new generating capacity, which has provided an increasingly wide cushion over sup-plies. In 2010, capacity reached 8,349MW,

“Serious power shortages in 2004 prompted Libya to invest heavily in new generating capacity”



a significant increase on the 2008 total of 6,196MW. Of the total installed, half was gas turbine technology, almost 30 per cent was combined-cycle technology, with the remainder covered by steam technology.

Technically, the state had a reserve mar-gin of over 40 per cent in 2010. However, the actual reserve margin may well have been much lower, given that it is unclear how much of the installed capacity was available. In both the desalination and wastewater sectors, a considerable amount of installed capacity was not operating in 2010 as a result of age, a lack of investment, poor operations and main-tenance. There is little to suggest that it was any different in the power sector, especially as some 3,000MW of installed capacity was built prior to 1995.

Source: MEED Insight

Major power plants, 2010

Power station Capacity (MW) Contractor Operation date Fuel

Tripoli West 325 Alstom 1976 Heavy fuel oil

Benghazi North steam 160 Deutsche Babcock 1979 Heavy fuel oil

Tripoli West 240 Bharat Heavy Electrical 1980 Heavy fuel oil; light fuel oil

Khoms steam 480 Deutsche Babcock 1982 Heavy fuel oil; light fuel oil; natural gas

Abu Kammash gas 45 Westinghouse 1982 Light fuel oil

Kufra gas 50 Fiat Avio 1982 Light fuel oil

Derna steam 130 BBC (ABB) 1985 Heavy fuel oil

Tobruk steam 130 BBC (ABB) 1985 Heavy fuel oil

Misurata steel 507 Hyundai Engineering & Construction 1990 Heavy fuel oil; natural gas

Sarir gas 45 Westinghouse 1990 Light fuel oil; natural gas

Tripoli South gas 500 ABB 1994 Light fuel oil

Zueitina gas 200 ABB 1994 Light fuel oil; natural gas

Khoms gas 600 ABB 1995 Light fuel oil; natural gas

Western Mountain 624 BHEL 2005-06 Light fuel oil; natural gas

Benghazi North combined-cycle 810 Daewoo Engineering & Construction 2007 Light fuel oil; natural gas

Azzawiya combined-cycle 1,350 Alstom, Hyundai Engineering & Construction

2005-07 Light fuel oil; natural gas

Benghazi combined-cycle 750 Daewoo Engineering & Construction 2009 Light fuel oil; natural gas

Sarir 750 Hyundai Engineering & Construction 2010 Light fuel oil; natural gas

Zueitina gas 550 Enka 2010 Light fuel oil; natural gas

“Technically, the state had a power reserve margin of over 40 per cent in 2010”



A feature of the local power sector is its dependence on liquid fuels. Gecol’s latest data shows that in 2008, liquids made up the majority of feedstock, with heavy fuel oil accounting for 21 per cent of the total and light fuel oil 32 per cent. Despite Lib-ya’s large reserves, natural gas had a rela-tively low share, making up 47 per cent.

Gecol’s long-term goal is to substantially reduce the consumption of liquids. In 2009, it announced plans to increase the share of gas in its total feedstock mix to 94 per cent by 2012 and to 99 per cent by 2016. Delays

Breakdown of power plant feedstock by type, 2008

21

%

32

47

Source: Gecol

Gas

Light fuel oil

Heavy fuel oil

in project implementation mean that these targets are likely to be missed, although they should be reached by 2020.

“A feature of the local power sector is its dependence on liquid fuels for the majority of feedstock”

Gecol’s projected fuel mix, 2008-16

Gecol=General Electricity Company of Libya; HFO=Heavy fuel oil; LFO=Light fuel oil. Sources: Gecol, AUPTDE

(%)

0102030405060708090

100

20092008

2010

2014

2013

2016

2015

2011

2012

100

90

80

70

60

50

40

30

20

10

0

Natural gas HFO LFO



As of early 2011, over 6,000MW of new capacity was at varying stages of comple-tion. The list of projects included con-tracts dating back to 2007, such as Gulf (Al-Khaleej) steam, as well as more recent schemes, including the 750MW Zueitina 2 combined-cycle project, which was awarded to South Korea’s Daewoo Engi-neering & Construction in October 2010.

Even before the civil war started, delays were frequently encountered on Gecol’s capacity building programme. A lack of clear direction, payment difficulties, budgetary issues and bureaucracy were all blamed. In the worst cases, several projects awarded by Gecol failed to proceed altogether either as a result of a change of heart by the client or a lack of funds.

In recent years, the Libyan power market has been dominated by Asian contractors, in particular Daewoo and its South Korean counterpart Hyundai Engineering & Construction. Their main competitors


Selected power projects under way as of early 2011

Plant TypeCapacity

(MW) Lead contractor

Gulf (Al-Khaleej) Steam 1,400 Hyundai Engineering & Construction

Sebha Gas turbine 750 Enka

Western Mountain extension Gas turbine 312 Bharat Heavy Electricals

Benghazi North Combined-cycle 750 Daewoo Engineering & Construction

Misurata Combined-cycle 750 Daewoo Engineering & Construction

Tripoli West extension Steam 1,400 Hyundai Engineering & Construction

Zueitina Combined-cycle 750 Daewoo Engineering & Construction

“Several projects awarded by General Electricity Company of Libya failed to proceed altogether”

have been India’s Bharat Heavy Electri-cals and Turkey’s Enka, which has carried out a number of projects in partnership with Global Electricity Services Company (Gesco), a joint venture of Gecol and South Africa’s Eskom Enterprises. On the consultancy side, the leading player has been ACESCo, a joint venture of Gecol and the Egyptian Electricity Holding Company (EEHC).

The outbreak of the civil war in early 2011 brought all project activity in the power sector to a halt. Following the end to hostilities in October 2011, all the leading international contractors in the market were preparing to visit Tripoli to assess the state of their project sites and to hold talks with the National Tran-sitional Council (NTC) over how to resume construction activities.

Demand outlookThe high volume of power plant contracts awarded in the period 2007-10 under-lined the pressing need for new capacity in the local power sector. Tripoli was, in effect, making up for the lost decade up to 2005 when no new power plants were commissioned in the North African state.

Gecol’s capacity building programme was the outcome of a masterplan announced in 2008, which called for installed capac-ity to rise to about 13,000MW in 2012 and to 19,000-20,000MW by 2020, from 6,196MW. The capacity forecast was



based on accelerated peak power demand growth of 10-12 per cent a year in the period 2009-25. Under this sce-nario, power demand was projected to reach 12,621MW in 2015 and 15,078MW in 2020, up from just 4,756MW in 2008.

To meet the demand growth and capacity targets, Gecol drew up a list of new projects to be executed in the period 2011-25. This called for the addition of 14,875MW of new capacity and included the Sebha, Tripoli West and Zueitina 2

Power demand outlook, 2010-25

Source: Gecol, 2008

(MW)

0

5000

10000

15000

20000

2010

2008201

52025

2020

20,000

15,000

10,000

5,000

0

Source: Gecol

Power plant projects planned by Gecol, 2011-25

Power plant Type Capacity (MW) Proposed commissioning date

Sebha Gas 855 2011

Zueitina phase 2 Gas 820 2011

Tripoli West Steam 1,400 2013

Gulf of Bomba Steam 1,050 2013

Misurata phase 2 Combined-cycle 750 2014

Tripoli East Steam 1,400 2015

Benghazi West Steam 1,400 2016

West Derna Steam 1,400 2017

Mellitah Combined-cycle 750 2017

Khoms expansion Steam 1,400 2018

Mellitah Combined-cycle 750 2019

Ras Lanuf Steam 1,400 2021

Abu Taraba phase 1 Combined-cycle 750 2022

Abu Taraba phase 2 Combined-cycle 750 2024

projects, for which contracts have already been awarded, and the proposed 1,500MW Mellitah station, all of whose output is destined for export.

For the first time, the government pro-posed that some of the new capacity should be developed by private compa-nies, as opposed to being conventionally procured from the engineering, procure-ment and construction (EPC) contracting market. In 2009-10, Tripoli held discus-sions with a number of developers over a

planned independent power project (IPP) programme, which was to begin with the Tripoli West plant. However, no agree-ments were signed before the civil war broke out.

Even before the civil war, there was grow-ing pressure on Gecol to revise its demand and capacity forecasts, as well as its project timetable. The utility had envisaged a spike in power demand in 2010 as a result of a series of large-scale real-estate and infrastructure projects

“No agreements were reached on the IPP programme before the civil war broke out”



being completed. In the end, however, project delays and cancellations meant that demand reached 5,759MW, well short of the 8,582MW projected in Gecol’s 2008 forecast.

The civil war has only served to make the future requirements of the power sector even more uncertain. In 2011, peak demand is reckoned to have fallen by 30-50 per cent and a return to pre-conflict demand growth rates will largely depend on how quickly the political situation can be stabilised and investment can resume. Even in the best case scenario, Gecol’s 2008 demand forecast for the year 2020 appears to be 3,000-5,000MW too high.

Transmission and distributionLibya’s transmission network extends for 2,000 kilometres between the Tunisian and Egyptian borders and for up to 900km south into the Sahara desert. Gecol com-pleted the internal interconnection of the national grid at the 220kV level in 1993 and a decade later began upgrading the network to 400kV. As of 2009, there were 442km of 400kV lines, with a further 3,200km under construction and 2,000km more planned. It also had 14,000km of 220kV lines, 22,000km of 66kV and 33kV lines and 45,000km of 11kV distribution lines.

In recent years, steps have been taken to connect the domestic grid with the regional network. The Libyan and Egyp-

“Steps have been taken to connect Libya’s domestic power grid with the regional network”

tian grids have been connected by a 220kV line since May 1998 and there were plans prior to the civil war to upgrade the voltage of the interconnec-tion to 400/500kV by 2012.

Libya and Tunisia are linked by a 380km-long double circuit line between Mede-nine and Abu Kammash, and a second 298km single line between Tataouine and El-Ruwis. The interconnections were completed in 2003, but technical issues held up their synchronisation.

A 400kV link between Libya and Algeria has also been proposed, along with a subsea cable to Italy to export 1,000MW of power from the planned Mellitah power plant.



A s a result of its energy riches, renew-able energy has traditionally been

overlooked in Libya. This is despite the state having good solar and wind poten-tial. Solar radiation levels are as high as 7.5 kilowatt hours (kWh) a square a metre a day, while wind speeds reach up to 7.5 metres a second. However, in 2010, renewables made up well under 1 per cent of the total energy mix and were confined to small scale photovoltaic (PV) projects serving rural communities.

The 2008 publication of an extremely ambitious roadmap by the Renewable Energy Authority of Libya (Reaol) moved renewable energy further up the agenda. Under the 20-year plan, Reaol called for 1,000MW of renewable energy to be installed by 2015, with wind accounting for 750MW of the total, concentrated solar power (CSP) 100MW, PV 50MW and solar water heat-ers 100MW.

Renewables

By 2020, Reaol aimed for renewables to reach 2,750MW, which it said would make up 10 per cent of the total energy mix, implying a total capacity of 27,500MW. However, this was well above General Electricity Company of Libya’s (Gecol’s) own 2008 estimate of 20,000MW by 2020.

In the following decade, the renewables share was set to reach 25 per cent in 2025 and 30 per cent by 2030.

Even before war broke out, international consultants were sceptical about Libya’s ability to meet its targets, concluding that these were more aspirational than deliver-able. The scepticism was partly due to the state’s lack of experience in the sector and its poor record for delivering power projects. In a study on renewable energy in Libya published in April 2010, Cairo-based Regional Centre for Renewable Energy & Energy Efficiency concluded that a lack of government coordination was a major stumbling block in the path of renewables.

“These targets and strategy for renewable energy in Libya do not seem to be fully shared among all participants, despite the cabinet’s approval of the target,” said the report. “One reason seems to be that the targets and strategy have not been devel-oped from any comprehensive analytical work. This lack of consensus means that the programmes and targets of Reaol may not in fact be realised in the time-scale envisaged.” The targets have looked even more unrealistic since the war broke out in early 2011.

“Renewables made up well under 1 per cent of the total energy mix in 2010” Reaol=Renewable Energy Authority of Libya; CSP=Concentrated solar power; PV=Photovoltaic; SWH=Solar

water heating. Source: Reaol

Reaol’s renewable energy targets, 2015-25

Wind (MW) CSP (MW) PV (MW) SWH (MW)Planned share of total

energy mix (%)

2015 750 100 50 100 6

2020 1,500 800 150 300 10

2025 2,000 1,200 500 600 25



Historical contextRenewable energy in Libya dates back to the 1940s, when the first wind-powered schemes were implemented and to the mid-1970s for the first solar projects. In 1976, the state’s inaugural PV pilot plant was commissioned and was followed in 1993 by the establishment of a 10MW pilot wind farm.

Up until 2007, renewable energy largely fell under the responsibility of Gecol. However, in a major government reshuffle that took place in March of that year, the General People’s Committee for Electric-ity, Water & Gas was established to over-see the work of Gecol and four new enti-ties, including Reaol. Two years later, the General People’s Committee for Electric-ity, Water & Gas was abolished and replaced by the new General People’s Committee for Utilities. In August 2009, the government set up a new Higher Council for Energy Affairs to formulate policy in the fields of oil and gas, nuclear energy, renewable energy and electricity. Following the move, Reaol reported directly to the cabinet.

Despite all the changes, the decision to establish a dedicated renewable energy authority was warmly welcomed and seen as the start of a new era for renewables. Reaol was given a budget of $480m for the period 2008-12 to undertake research, planning and implementation of alterna-tive energy projects, although beyond the

Derna wind farm scheme, there were few details about which schemes would pro-ceed. In December 2010, just two months before the civil war started, the state’s first major renewable energy contract was awarded, with Spain’s Amtors winning phase one of the Derna wind farm project.

To date, there have been no serious efforts made to reduce energy use, although this was part of the responsibility of the new energy council that was set up in September 2009. Members of every energy-related organisation are on the board, from the Industry & Economic Development Ministry to the National Oil Corporation (NOC), Gecol and Reaol.

The council aimed to address the lack of co-ordination between stakeholders in the energy sector and promote renewables. Its objectives were to prepare energy policy, develop the structure of the sector, establish procedures for foreign investment, set out a pricing strategy and evaluate renewable energy resources, especially solar power.

“The new council aimed to address the lack of co-ordination between stakeholders in the energy sector”



PolicyLibya has lagged well behind its neigh-bours on the renewable energy front, hav-ing no energy efficiency or enabling legis-lation in place for renewables and no financial support, such as feed-in tariffs. There is also no law allowing private sec-tor participation in the electricity sector.

It was hoped that some of these legislative gaps would be filled by a new electricity law, which was under preparation in 2010. The draft law, expected to have been similar to Egypt’s, was a key compo-nent in a wider restructuring of the elec-tricity sector, which would have allowed private generators for the first time.

Explicit provisions were originally to be made for both renewable energy and energy efficiency in the draft. However, subsequent reports suggested these would be removed and included in separate laws. At the same time, Reaol was expected to be split into two, with one entity looking after physical assets and the other to undertake regulation and planning.

As of mid-2011, the electricity law had still to be passed and there seems little prospect of it materialising any time soon. Without it, progress on renewables will be limited.

Wind powerLibya has a good wind profile. According to a 2004 wind measurement programme, average wind speeds are 6-7.5 metres a second across the country. With 1,770 kil-ometres of coastline, offshore wind gener-ation is also a possibility, although to date this has not been pursued.

Wind power was first used in Libya in the 1940s for water pumping. However, it was not until the 2004 study that it was con-sidered for large-scale applications. In the study, five coastal sites were identified as

NIGER

ALGERIA

TUNISIA

CHAD

SUDAN

Tripoli

Libyan wind map

m/s=Metres a second. Source: Reaol

10.5

10

9.5

9

8.5

8

7.5

7

6.5

6

5.5

5

4.5

Draft result: 20.02.2001Mean wind speed: 50m(Grid size 5km, 1986-2006)

(m/s)

Source: Planbleu

Average wind speeds at five coastal locations

Location Speed (metres a second)

Derna 7.5

Misurata 6.6

Sirte 6.3

Al-Maqrun 7.1

Tolmeita 5.9

“There is no law allowing private sector participation in the country’s electricity sector”



offering the best prospects for wind gen-eration. These ranged from Misurata in central Libya to Derna in the east, which had recorded the highest wind speeds at 7.5 metres a second.

Based on the wind speed measurements, in 2008, Reaol drew up a wind energy programme aimed at delivering 750MW of capacity by 2015, 1,500MW by 2020 and 2,000MW by 2030. Two coastal sites, Derna and Al-Maqrun on the Gulf of Sirte, were selected for the first wind farms and were to be followed by:• Mellitah, Tarhouna and Asabab in the western region with capacity of 250MW• Gallo, Almasarra and Tazerbo in the south eastern region with capacity of 120MW• Aliofra, Sebha, Ghat and Ashwairif in the south western region with capacity of 120MW

In December 2010, the first commercial wind farm project was awarded for the Derna 1 scheme. Spain’s Amtor beat off competition from the US’ GE and Germa-ny’s Siemens to win the $142m contract, which called for 60MW of wind turbine capacity to be installed by late 2012.

Turkish subcontractor Biltek managed to complete some of the project’s prepara-tory work before the civil war broke out. Despite the site being well away from areas of conflict, the scheme was eventu-ally put on hold, although there were Source: Reaol

Planned wind farm projects

Wind farm Capacity (MW) Status

Derna 1 60 Contract awarded in Dec 2010

Derna 2 60 Planned

Al-Maqrun 1 120 Planned

Al-Maqrun 2 120 Planned

Western region 250 Planned

Southeastern region 250 Planned

Southwestern region 250 Planned

reports in November 2011 that work had resumed.

Derna 1 was always seen as the trailblazer for Libyan wind projects. However, the conflict dealt a serious blow to it and other planned wind farm prospects. Delivery of wind energy infrastructure is totally reliant on international companies and technologies, so no further progress is likely to be made until Libya stabilises and international companies return.



Solar Libya has considerable solar potential. The country’s daily radiation levels are as high as 7.5kWh a square metre, it enjoys 3,000-3,500 hours a year of sunshine and most of its terrain is both flat and unin-habited. The highest concentration of solar radiation is in the south.

To date, the only successful applications of solar have been small scale. Since the mid-1970s, PV panels have been used to power cathodic protection systems on oil pipelines in the desert and telecommuni-cations equipment and water pumping stations in remote areas. In 2003, PV tech-nology was incorporated into a rural elec-trification programme, which is still ongo-ing. As of 2010, there were more than 440 completed PV projects providing power to over 2,000 rural inhabitants. Libya plans to have more than 2MW of PV capacity by 2012 and 10MW by 2020.

Success at a local level has not been translated into large-scale PV generation, however. In its 2008-12 programme, Reaol planned three 5-10MW PV plants to be connected to the grid at Al-Jufra, Green Mountain and Sebha, and the installation of 500 PV rooftop systems. It also pro-posed the construction of the state’s first 100MW CSP plant using parabolic troughs. Finally, it called for the establish-ment of joint ventures to manufacture and assemble PV panels and solar water heat-ers. The government had even talked

about exporting solar power to Europe through initiatives, such as Desertec. In late 2010, Abu Dhabi’s Al-Maskari Hold-ing announced plans for a $3bn solar energy hub near Tripoli, which included a subsea cable to feed electricity under the Mediterranean.

But even without war breaking out, meet-ing the 2012 targets and delivering on the planned export projects seemed highly unlikely. Progress on all the large-scale schemes had been painfully slow and, unlike on the wind front where at least the Derna contract had been awarded, there appeared to be very little progress on the state’s solar plans.

NIGER

TUNISIA

CHAD

SUDAN

Tripoli

Solar thermal electricity generating potentials

<1,8001,8751,9502,0252,1002,1752,2502,3252,4002,4752,5502,6252,7002,7752,8502,9253,000

DNI=Direct normal irradiance; kWh/m2/y=Kilowatt hours a square metre a year. Source: MED-CSP

DNI (kWh/m2/y)

“Even without war breaking out, meeting the 2012 targets seemed highly unlikely”



Desalination has traditionally played a minor role in Libya’s water sector, largely as a result of Tripoli’s focus on developing the Great Man-made River (GMR) project to meet its water requirements. In 2009, it made up only 11 per cent of total water supplies, well below the GMR’s share of 61 per cent. However, prior to the civil war, Tripoli was proposing a significant ramp-up in desalination capacity to meet rising potable water demand in urban areas and, for the first time, was targeting private investors.

Libya was an early adopter of desalina-tion, building plants to process brackish water in rural locations for domestic and industrial use in the 1960s. Most of the 200,000 cubic metres a day (cm/d) of capacity was based on reverse osmosis (RO) and electrodialysis technology. In the period 1975-85, an intensive invest-ment programme was undertaken, which resulted in about 300,000 cm/d of new

Desalinationplant capacity being built, with the focus on multi-stage flash (MSF) technology. A further 440,000 cm/d of new capacity, largely based on multi-effect distillation (MED) technology, was installed between 1985 and 2010.

However, as in other infrastructure sectors, a significant amount of desalination capac-ity was not in operation before the civil war due to bureaucracy, absence of distri-bution networks, poor maintenance and the age of existing assets. In March 2010, the General Desalination Company of Libya (GDCol) estimated that total operat-ing desalination capacity was about 290,000 cm/d. This figure was well below the 850,000 cm/d of capacity that had been installed in the state since the mid-1960s.

GDCol and its predecessor, the General Electricity Company of Libya (Gecol), were unusually open about the problems affecting the desalination sector. Ever

“Desalination made up only 11 per cent of the country’s total water supplies in 2009”



since the first plant was commissioned in the 1960s, the sector has suffered from a lack of skilled workers with desalination experience. As recently as 2007, Gecol blamed the lack of experienced operators for 150,000 cm/d of capacity being out of action.

Environmental issues have also handi-capped production, particularly the issue of seaweed playing havoc on filtra-tion systems. Corrosion, poor design and years of economic sanctions have also been blamed for the sector’s poor performance, which was underlined in 2007 when Gecol estimated that some 800,000 cm/d of capacity was either shut down or under-utilised.

In an attempt to improve efficiency, the sector underwent several restructurings in the period 2007-10. The result was that as of early 2011, existing and new stan-dalone desalination infrastructure came under the responsibility of GDCol. The company, previously known as General Desalination Company (GDC), was a sub-sidiary of Gecol until 2007, when it was handed over to the newly formed Utili-ties Ministry.

With the exception of the Bomba MSF plant operated by Gecol, all desalination capacity is run by GDCol. By regional standards, Libya’s desalination plants are small with capacities ranging between 20,000 cm/d and 50,000 cm/d. In con-

Actual operating desalination capacity, 2010*

Plant Operator Capacity (cm/d) First operational Technology

Bomba Gecol 30,000 1988 MSF

Zliten GDCol 30,000 1992 MED

Tobruk II GDCol 40,000 2002 MED

Abu Taraba GDCol 40,000 2007 MED

Derna GDCol 40,000 2009 MED

Sousa GDCol 50,000 2009 MED

Azzawiya GDCol 20,000 2010 MED

Zuara GDCol 40,000 2010 MED

*=Does not include small units serving industry and the military; cm/d=Cubic metres a day; Gecol=General Electricity Company of Libya; MSF=Multi-stage flash; GDCol=General Desalination Company of Libya; MED=Multi-effect distillation. Source: GDCol

trast, most of Saudi Arabia’s new plants have capacities of over 500,000 cm/d. Moreover, all GDCol’s capacity is based on MED technology and has been built by France’s Sidem, which until 2009, domi-nated the local desalination sector.



EGYPT

NIGER

TUNISIA

LIBYA

CHAD

SUDAN

Tripoli

Abu Taraba Tobruk

Zliten

Zuara

Azzawiya SousaDerna

Bomba

Zliten30,000 cm/dAzzawiya

20,000 cm/d

Sousa50,000 cm/d

Derna40,000 cm/d

Bomba30,000 cm/d

Abu Taraba40,000 cm/d

Tobruk40,000 cm/d

Zuara40,000 cm/d

Sidem’s stranglehold in the engineering, procurement and construction (EPC) mar-ket was finally broken in November 2010, when GDCol awarded an estimated $100m contract to Singapore’s Hyflux to build a 40,000 cm/d plant at Tobruk. The award was notable for being the first for a large-scale RO plant in over 20 years.

The Tobruk project marked a reversal in policy by GDCol. In 2008, the government unveiled an ambitious programme to build 2.5 million cm/d of new capacity through 11 projects up to 2020. The pro-gramme represented a radical departure from past desalination procurement in Libya. For a start, the planned plants were to be far larger than anything Tripoli had ever considered before, with capacities of up to 500,000 cm/d.

Moreover, GDCol proposed that all new plants would use RO technology and not MED. Finally and most critically, rather than tendering the work as EPC contracts as had been the norm in the past, the gov-ernment body opted to develop them as *=As of 2010; cm/d=Cubic metres a day. Sources: MEED Projects, GDCol

cm/d=Cubic metres a day. Source: GDCol


New desalination plants under phase 1, 2010-14

Location Capacity (cm/d) Status* Prospective developer

Benghazi 400,000 Under discussion Hyflux

Tripoli 500,000 Under discussion Hyflux

Tobruk 150,000 Under discussion Befesa

Misurata 500,000 Under discussion Befesa


Location Capacity (cm/d) Status

Derna 100,000 Planned

Sousa 100,000 Planned

Sirte 100,000 Planned

Jifarah coast 300,000 Planned


Location Capacity (cm/d) Status

Azzawiya 100,000 Planned

Zuara 100,000 Planned

Bomba 100,000 Planned

“The planned plants were to be far larger than anything Tripoli had ever considered before”

independent water projects (IWPs). Under the proposed model, foreign partners with technology, construction and operations experience were to be brought into new project companies, which would build, own and operate the plants.

The IWP programme was divided into three phases. Under phase 1, running from 2010-14, an estimated 1.55 million cm/d of new capacity was planned at four separate sites in Tripoli, Benghazi, Misu-rata and Tobruk. The second phase, cov-ering the period 2014-16, called for four more plants to be built with a combined capacity of 600,000 cm/d. The third phase planned to add 300,000 cm/d of new capacity in the period 2017-20.

Major desalination plants in operation




In 2009, GDCol signed up two prospective partners for the phase 1 programme. A memorandum of understanding (MoU) was reached with Hyflux to build the 500,000 cm/d plant at Tripoli and a 400,000 cm/d facility at Benghazi. This was followed by Spain’s Befesa signing an MoU to build three new plants with total capacity of 800,000 cm/d at Misurata, Tobruk and Tripoli West, even though the Tripoli site was not originally included in GDCol’s list of planned projects.

Little progress was made on any of the IWPs before the civil war, which may explain why GDCol decided to award Hyflux a separate EPC contract for the Tobruk plant in late 2010. Even when the privatisation scheme was launched, there was scepticism about whether it could ever succeed. Libya lacks robust legal and financial frameworks to support build-own-operate contract models and has no experience of commercially financing major infrastructure projects. There were also considerable doubts about the gov-ernment’s commitment to increasing the role of the private sector, given the past state domination.

Finally, the reputation of GDCol, and its predecessor Gecol, was poor for project delivery, even when tendering much sim-pler EPC contracts. This was demon-strated with a planned 40,000 cm/d plant at Sirte. It first attracted bids in early 2007 from Austria’s Wabag, France’s Sidem and

South Korea’s Doosan Heavy Industries & Construction. The following July, Gecol scrapped the tender on account of high costs. The project was subsequently inte-grated into the planned Al-Khaleej steam power project, which itself was later abandoned. The scheme was then resur-rected in 2008, with capacity increased to 50,000 cm/d, but was never awarded.

The lack of water was a major problem for several cities during the civil war, with power disruptions and network problems being the main issues, rather than damage to desalination plants.

Going forward, the National Transitional Council (NTC) faces major decisions on the desalination, and wider water, front. A key decision will have to be taken on the future of Gaddafi’s flagship infrastruc-ture project, the GMR, and the role it should play. NTC will also have to decide whether the pre-revolution body GDCol and its procurement strategy should remain in place. In September 2011, its UK representative, Guma el-Gamaty said that the NTC was open to private invest-ment in the desalination sector, but con-ceded that it was still very early days for the reconstruction programme.



L ike its neighbours, Libya depends on groundwater for the majority of its

water supplies. However, most comes in the form of fossilised water from aquifers deep in the desert, through the Great Man-made River (GMR) project.

The GMR has provided an increasing share of Libya’s water in recent years, accounting for 61 per cent of the total in 2009. The 4,000-kilometre network of pipelines, linking massive underground aquifers at Kufra, Murzuq and Sarir with Libya’s urban centres on the Mediterra-nean coast, has also received the lion’s share of investment in the water sector.

In the 25 years up to 2010, the government spent more than $20bn on the project, which contributed over 1.6 million cubic metres a day (cm/d) to the country’s water supply. Prior to the conflict, plans called for the GMR to supply about 6 million cm/d by 2030, according to the General

The Great Man-made River project

Water Authority (GWA), a largely autono-mous arm of the Agriculture Ministry.

The major water deposits under the Sahara desert were first discovered in the 1950s during oil exploration. The new-found aquifers were partially developed in the 1970s, with production reaching about 500,000 cm/d and supplying mainly agriculture. In the late 1970s, the government undertook studies to assess the optimum use for the fossilised water. It concluded that it would not be cost-

“The major water deposits under the Sahara desert were first discovered in the 1950s”

Water supply by source

GMR11

%

28

61

Water supply

GMR=Great Man-made River. Source: General Desalination Company of Libya

Groundwater

Desalination



effective to grow crops in the south of the country and proposed instead that a net-work of pipelines should be built to trans-port the water to the more fertile and already developed coastal plains.

Plans for the GMR project were first for-mulated in the 1980s by the UK’s Brown & Root, now part of the US’ KBR, and Price Brothers, a pre-stressed concrete pipeline specialist. Initially, both firms worked for the government and then for the Great Man-made River Authority (GMRA), which was set up in 1983.

The plans drawn up by the consultants and the government called for a massive water pipeline network to be built in phases. In total, it envisaged the drilling of some 1,350 production wells spread across the four basins, which would be connected to the coast by 600,000 sec-tions of pre-stressed concrete cylinder pipes (PCCP). In total, more than 4,000km of pipeline were to be laid, delivering over 6 million cm/d of water.

The first wellfields to be developed were planned at Tazerbo and Sarir, in the east and southeast of the country, to tap the Sirte basin. A total of 284 wells were to be drilled at the two locations, which would ultimately pump 2 million cm/d of water. This was to be followed by the develop-ment of three wellfields on the Hassouna basin, which aimed to produce 2.5 mil-lion cm/d of water from 586 wells at the

northeast, east and west Jabal Hassouna fields. The first two phases planned were considered priorities, producing the majority of the water supply projected under the GMR programme and account-ing for most of the capital outlay.

The development of a single wellfield at Kufra was then planned, which would add 1.68 million cm/d of supply. This was to be followed by new wellfields at Ghadames and Jaghboub, which would further tap the Hassouna and Sirte basins. The Ghadames project called for the con-struction of 144 wells to produce 90 mil-lion cubic metres a year (cm/y), while the Jaghboub scheme was planned to produce 50 million cm/y from 40 wells.

Each wellfield was to be linked to storage reservoirs and distribution networks for domestic and agricultural purposes through four-metre-diameter pipelines. In the east, the Sarir, Tazerbo and Kufra wellfields were to be connected to the network, which would transport water to

“Plans for the Great Man-made River project were first formulated in the 1980s”

ALGERIA

TUNISIA

CHAD

SUDAN

LIBYA

EGYPT

NIGER

TUNISIA

LIBYA

CHAD

SUDAN

Tripoli

The Great Man-made River project

Phase IV

Phase III

Phase I

Phase II

Pipe production plant

Tobruk

Brega PCCP plant

Sarir PCCP plant

Sarir wellfield

Northeast Jabal Hassouna wellfield

East Jabal Hassouna wellfield

Benghazi

Ajdabiya

Sirte

Tazerbo

Kufra

Reservoir

PCCP=Pre-stressed concrete cylinder pipe. Sources: GMRA, MEED

Jaghboub

Ghadames



a holding reservoir at Ajdabiya and then on to two larger reservoirs, called Al-Gardabiya and Omar Mukhtar. The separate Jaghboub system, close to the Egyptian border, was designed to service Tobruk and its surrounding area.

In the west, the Hassouna project was to transport water directly to the capital, Tripoli, as well as Tarhouna, while the Ghadames scheme would serve the coastal towns of Zuara and Azzawiya. Eventually, the Kufra-Sarir-Tazerbo-Sirte-Benghazi system would be linked via pipeline to the Hassouna-Tripoli network, creating a nationwide system.

In total, the GMR project called for the con-struction of five major storage reservoirs with total capacity of 55 million cubic metres. By far, the largest, with a proposed capacity of 24 million cubic metres, was the Grand Omar Mukhtar reservoir.

A key part of the project was the con-struction of two PCCP manufacturing plants at Sarir and Brega. Each plant was

kcm/d=Thousand cubic metres a day. Sources: GMRA, MEED Insight

cm=Cubic metres. Sources: GMRA, MEED Insight

“The Hassouna project was designed to transport water directly to Tripoli and Tarhouna”

to be provided with water from specially drilled wellfields. Seven wells were to be drilled to supply the Brega plant with 14,000 cm/d of water, while three wells were planned to deliver 11,000 cm/d of water for the Sirte facility. A 90MW power plant was to provide energy at the Sarir plant and the nearby drilling operations.

Construction was originally planned to be carried out in three phases:• Phase 1 would cover the Kufra-Tazerbo-Sarir-Ajdabiya-Sirte-Benghazi systems• Phase 2 would take in the Hassouna-Tripoli-Tarhouna network• Phase 3 would involve the Jaghboub-Tobruk and Ghadames-Azzawiya-Zuara system, along with the Sirte-Tripoli link

However, the plan was subsequently revised, with another phase added. This covered the development of the Kufra field, the Kufra-Sarir pipeline and the Sirte-Tripoli pipeline, which was removed from the first and third part of the project.

The GMRA had also considered undertak-ing a fifth phase, which would link the wellfield at Sarir Qattusah in the west of the country to the Hassouna-Jifarah por-tion of the project. This phase would add 500,000 cm/d of production capacity to the GMR, boosting overall output to a peak of 7 million cm/d.

Under the 1983 masterplan prepared by the GMRA and Brown & Root, it was

The Great Man-made River wellfields

Number of wells Projected production (kcm/d)

Ghadames system 106 250

Northeast Jabal Hassouna system

60 600

East Jabal Hassouna system 479 1,400

West Jabal Hassouna system 47 500

Brega pipe manufacturing plant, water system

7 14

Sarir pipe manufacturing plant, water system

3 14

Sarir wellfield system 126 1,000

Tazerbo wellfield 108 1,000

Kufra system 285 1,680

Jaghboub 40 137

Planned reservoirs on the Great Man-made River project

Location Planned capacity (million cm)

Ajdabiya holding reservoir 4

Al-Gardabiya reservoir 6.8

Omar Mukhtar reservoir 4.7

Grand Al-Gardabiya reservoir 15.4

Grand Omar Mukhtar reservoir 24



intended that South Korea’s Dong Ah Construction would be the main contrac-tor for each phase, with the US engineer-ing firm overseeing its work. However, financial difficulties and concerns over its performance meant that Dong Ah only worked on the first two phases of the scheme.

Phase 1The GMR’s first phase covered the construction of the Tazerbo-Sarir-Sirte-Benghazi system, which is often referred to as the SS/TB project. Dong Ah was awarded the $3.8bn main construction contract in 1983, which was largely com-pleted a decade later.

While it carried out the majority of the contract itself, the Korean contractor also subcontracted out several packages, including the construction of the Grand Omar Mukhtar reservoir at Benghazi and the Grand Al-Gardabiya reservoir at Sirte, which was won by the local Al-Nahr Construction. A number of ele-ments of the first phase project were not included in Dong Ah’s scope, including the well drilling contract, which was awarded to Brazil’s Braspetro.

The first phase programme breaks down into several distinct parts. The Tazerbo wellfield is connected to a 170,000-cubic-metre collection tank, which is then linked to the first major 256km pipeline network. This transports water to Sarir,

where there are two more 170,000-cubic-metre tanks and the separate Sarir collec-tion system joins the main pipeline.

From here, two four-metre-diameter pipe-lines extend a further 380km north to the Ajdabiya reservoir. The two pipelines then travel east and west to Benghazi and Sirte, where they meet end reservoirs as well as the Grand Omar Mukhtar and Grand Al-Gardabiya reservoirs, built to stockpile water in case of drought.

Dong Ah designed and built the PCCP plants at Sirte and Brega and was also contracted to operate both factories for the duration of the first phase. The Sarir plant has the capacity to produce up to 120 pipeline sections a day and the Beng-hazi plant can construct 80 pipeline sec-tions a day.

As part of phase 1, the contractor also built 1,500km of road to transport equip-ment along, as well as offices, workshops, accommodation and support facilities. These facilities have since been consoli-dated into operations and maintenance stations at Tazerbo, Sarir, Brega, Sirte and Benghazi. In addition, Dong Ah and Japan’s Itochu Corporation built the 90MW Sarir power plant.

GMR phase 1 was inaugurated in 1993, although overall completion was not achieved until 1996/97.

ALGERIA

EGYPT

NIGER

TUNISIA

LIBYA

CHAD

SUDAN

Tripoli

The Great Man-made River phase 1 network

Pipeline


Tobruk

Brega PCCP plant

Sarir PCCP plant

Sarir wellfield

Benghazi

Ajdabiya

Sirte

Tazerbo

Kufra

Reservoir

PCCP=Pre-stressed concrete cylinder pipe. Sources: GMRA, MEED Insight

Jaghboub

Ghadames



Phase 2Dong Ah started work on the second phase of the project in 1986, although it was not until 1990 that it was officially awarded the $6.1bn construction contract. During this phase, which cost $7.4bn in total, 2,115km of pipeline was installed to carry 2.5 million cm/d of water from the east, west and northeast Jabal Hassouna wellfields to Tarhouna on the Jifarah Plain and then on to Tripoli. In addition, associ-ated pumping stations and regulating

line to link the Hassouna field with Tarhouna and Tripoli at an estimated extra cost of $760m.

The initial scope of the second-phase project had only covered the construction of a central 1,715km pipeline linking the wellfield with Tripoli. The eastern line, which included a station at Assdada, allowed the system to be integrated into phase one via a second pipeline linking it with facilities at Sirte. The central pipe-

tanks were built, along with 2,155km of road.

Tripoli decided to review the project in 1991, when some 25 per cent of the scheme had already been completed, fol-lowing issues related to collapsing wells on phase one. With coastal aquifers becoming depleted faster than expected and urban water demand increasing, how-ever, Tripoli decided to expand Dong Ah’s phase 2 contract scope, adding a 380km

“Dong Ah started work on the second phase of the Great Man-made River project in 1986”



line has a capacity of 880,000 cm/d, while the eastern branch can carry 1.2 million cm/d.

In 1996, the South Korean firm was awarded an additional $350m contract to drill about 260 new wells at Hassouna to boost production at the field. This exten-sion came to be known as Hassouna West. In the same year, Dong Ah was informed that it would be awarded the $6bn con-tract to build the third phase of the project, which then covered the Jaghboub-Tobruk and Ghadames-Azzawiya-Zuara systems, along with the Sirte-Tripoli link.

However, in 1997, Tripoli decided to competitively tender the phase and split the work up into seven individual pack-ages. In December of that year, France’s Dumez submitted the lowest price for the first of these contracts, covering the Sirte-Tripoli link and associated pumping sta-tions, with a price of about $1bn. How-ever, a drop in oil prices and increasing political instability in the country saw the project put on hold and no further deals were tendered.

More worrying for Dong Ah was the onset of the 1997 Asian crisis. Unable to cope with debts of about $3bn, it slowed the pace of work on the second phase of GMR and in August 2000, applied for an 18-month extension to the phase 2 works. This led to disputes between Tripoli and the South Korean contractor, which was

eventually liquidated by the South Korean government in 2001.

To ensure the second phase of the project was completed, an agreement was reached between Seoul and Tripoli whereby Dong Ah’s Libyan operations were taken over by its former partner on the project, South Korea’s Korea Express. The Libyan operation set up a consortium with its former subcontractor Al-Nahr, taking a 50 per cent stake in a new ven-ture. This was later reduced to 25 per cent and today, Al-Nahr is wholly owned by the GMRA.

Several other international contractors worked on phase 2. These included France’s Vinci Construction, which won a $410m contract to build pumping sta-tions at Al-Gardabiya, Wadi Wishkah and Assdada in 1999.

“In 1997, Libya decided to split phase two of the Great Man-made River project”

ALGERIA

EGYPT

NIGER

TUNISIA

LIBYA

CHAD

SUDAN

Tripoli


Phase II

Tripoli-Sirte pipeline

TobrukBenghazi

Ajdabiya

Sirte

Reservoir

Sources: GMRA, MEED Insight

Northeast Jabal Hassouna wellfield

East Jabal Hassouna wellfield



Phase 3In 2001, a consortium of Japan’s Nippon Koei and the UK’s Halcrow was awarded the $15.5m contract to design the third phase of the project, with a reduced scope. This covered the construction of pumping stations at the Kufra wellfield, a 380km pipeline linking the field with the Sarir/Tazerbo network, along with a 140,000-cubic-metre regulating tank, flow control stations and roads. The contract ran until 2009 and required new studies of the field to be carried out.

In 2005, Turkey’s Tekfen was awarded the $500m contract to build the pipeline link-ing Kufra with Sarir, while in October 2010, Canada’s SNC Lavalin won a $450m contract to design and build the Kufra wellfield system by 2015.

ALGERIA

EGYPT

NIGER

TUNISIA

LIBYA

CHAD

SUDAN

Tripoli


Phase I

Phase III

TobrukBenghazi

Ajdabiya

Sirte

Reservoir

PCCP=Pre-stressed concrete cylinder pipe; GMR=Great Man-made River. Sources: GMRA, MEED


Jaghboub

Brega PCCP plant

Sarir PCCP plant

Sarir wellfield

Tazerbo

KufraGMR 3

GMR 1



Phase 4In 2004, Al-Nahr was awarded a $960m contract for the fourth phase of the project, covering drilling, construction of production facilities and installation of pipeline systems for the Ghadames-Azzawiya-Zuara and Jaghboub-Tobruk systems at a cost of $960m. The following year, the company awarded a design and project management subcontract to Brown & Root. The Ghadames-Zuara-Azzawiya section was due to be completed by the end of 2011 although this was delayed by the civil war.

ALGERIA

EGYPT

NIGER

TUNISIA

LIBYA

CHAD

SUDAN

Tripoli


Phase IV Western Section

Phase IV Eastern Section

TobrukBenghazi

Zuara

Azzawiya

Ajdabiya

Sirte

Sources: GMRA, MEED

Jaghboub

Ghadames



na=Not available. Source: MEED Insight

GMR=Great Man-made River; cm/d=Cubic metres a day. Source: GMRA

Major construction contracts awarded on the Great Man-made River project

Description Contract type Value ($m) Contractor

Phase 1 Sarir-Sirte/Tazerbo-Benghazi system

Main construction contract

3,800 Dong Ah

Reservoirs Construction subcontract na Al-Nahr Construction

Tazerbo/Sarir wellfields Drilling na Braspetro

Phase 2 Hassouna-Tripoli-Tarhouna/Assdada system


6,100 Dong Ah

Hassouna-Tarhouna system Main construction contract

760 Dong Ah

Hassouna wellfield Drilling 360 Dong Ah

Phase 3 Al-Gardabiya/Assdada pumping stations


410 Vinci

Al-Gardabiya-Assdada pipeline


na Al-Nahr/Vinci

Kufra wellfield system Main construction contract

450 SNC Lavalin

Kufra-Tazerbo/Sarir pipeline system


500 Tekfen

Sarir pipe production plant Revamp and operation 1,100 SNC Lavalin

Phase 4 Ghadames/Zuara/Azzawiya system

Design, construction, operation of Ghadames-Zuara-Azzawiya system; Jaghboub-Tobruk system

960 Al-Nahr Construction

Planned water usage for the first three phases of the GMR project (cm/d)

Municipal Agricultural Industrial Total

Phase 1 410,170 1,506,030 83,800 2,000,000

Phase 2 1316090 1,175,660 8,250 2,500,000

Phase 3 253,000 1,427,000 0 1,680,000

“The GMR project is unlikely to be abandoned, given its growing contribution to water supply”

Since 1983, the GMRA has awarded more than $15bn worth of contracts, with the majority going to Dong Ah. Its sister agency, the GMR Water Utilisation Authority (GMRWUA), also became a sig-nificant client, placing over $2bn worth of contracts for reservoirs, water distribution networks and infrastructure for new tracts of agricultural land.

Agriculture was always earmarked as the main beneficiary of the GMR project. From its inception, Tripoli set a target for at least 80 per cent of GMR water to be used for agricultural production, by irri-gating up to 160,000 hectares of land. However, because of a rapid decline in water production from Libya’s coastal aquifer system, as well as the slow pace of development of the country’s desalina-tion network, the target was lowered to 66-70 per cent prior to the civil war.GMR infrastructure sustained damage dur-ing the civil war, most notably the Brega PCCP plant, which was hit by Nato air-strikes in July 2011. At the time, Nato said that the plant had been targeted as it was under the control of Gaddafi loyalists and was home to multiple rocket launchers.

In the immediate aftermath of the civil war, it was unclear how much priority the new government in Tripoli would attach to completing existing contracts on the GMR, or to awarding outstanding work. The GMR always was a highly political project for Gaddafi, who described it as

‘the eighth wonder of the world’. It is unlikely to be abandoned completely, given the vast sums already invested in it and its growing contribution to water sup-ply. Moreover, if future investment is not forthcoming, then an alternative water production strategy will need to be devel-oped and quickly, or Libya will face grow-ing water shortages.



Even before the civil war broke out, Libya’s wastewater sector was in des-

perate need of attention, investment and additional capacity. Its aging infrastruc-ture was struggling to meet the growing demands of an expanding population. The result was that increasing amounts of sewage were being dumped either at sea or in the desert. Six months of hostilities, during which electricity was frequently cut to sewage treatment plants, only served to exacerbate the problem.

For many years, the wastewater sector was a secondary priority for the Gaddafi regime, coming well down the political agenda and well below the Great Man-made River (GMR) project. As of 2010, there were about 40 large-scale plants with total design capacity of just under 500,000 cubic metres a day (cm/d). But actual capacity was considerably less at about 240,000 cm/d, with only a handful of plants operating near to their potential.

Wastewater



cm/d=Cubic metres a day. Sources: Government of Libya, Wheida Edawi, Wastewater Treatment & its Applications as a Water Supply in Libya

Wastewater treatment plants

Plant Commissioning year Design capacity (cm/d) Treatment type

Ajdabiya 1988 15,600 Activated sludge

Benghazi A 1965 27,300 Trickling filters

Benghazi B 1977 54,000 Trickling filters

Al-Marj A 1964 1,800 Activated sludge

Al-Marj B 1972 1,800 Activated sludge

Al-Beida 1973 9,000 Activated sludge

Tobruk A 1963 1,350 Trickling filters

Tobruk B 1982 33,000 Activated sludge

Derna 1965 4,550 Trickling filters

Derna 1982 8,300 Activated sludge

Sirte 1995 26,400 Activated sludge

Abu Hadi 1981 1,000 Activated sludge

Marsa al-Brega 1988 3,500 Activated sludge

Zuara 1980 41,550 Activated sludge

Sabrata 1976 6,000 Activated sludge

Sorman 1991 20,800 Activated sludge

Azzawiya 1976 6,800 Activated sludge

Zenzour 1977 6,000 Activated sludge

Wastewater treatment plants (continued)

Plant Commissioning year Design capacity (cm/d) Treatment type

Tripoli A 1966 27,000 Trickling filters

Tripoli B 1977 110,000 Activated sludge

Tripoli C 1981 110,000 Activated sludge

Tajoura 1984 1,500 Activated sludge

Tarhouna 1985 3,200 Activated sludge

Gharyan 1975 3,000 Activated sludge

Yafran 1980 1,725 Activated sludge

Meslata 1980 3,400 Activated sludge

Khoms 1990 8,000 Activated sludge

Zliten 1976 6,000 Activated sludge

Misurata A 1967 1,350 Trickling filters

Misurata B 1982 24,000 Activated sludge

East Garyat 1978 500 Activated sludge

West Garyat 1978 150 Activated sludge

Topga 1978 300 Activated sludge

Shourif 1978 500 Activated sludge

Sebha A 1964 1,360 Trickling filters

Sebha B 1980 47,000 Activated sludge

The main problem facing the sector has been the age of existing treatment capacity. Virtually all of the capacity was built between 1965 and 1995, meaning that much of it has now exceeded its sell-by date. The sector has also suffered from a lack of management, engineering and plan-ning expertise, with some plants never having been used at all as a result of

planned waste collection and distribution pipeline networks never having been built.

A further feature of the wastewater sector is the uneven spread of treatment capacity across Libya. In rural areas, sewage treat-ment plants are practically nonexistent, with the overwhelming majority concen-trated along the Mediterranean. Even in

“Much of the state’s wastewater capacity has now exceeded its sell- by date”

urban centres, such as Benghazi and Tripoli, there has been a lack of capacity and network.



NIGER

TUNISIA

LIBYA

CHAD

SUDAN

Tripoli

Sirte

Benghazi Tobruk

Misurata

Zuara

Sorman

Sebha

The lack of working treatment capacity has meant that a significant amount of raw sewage is dumped in rural areas or piped directly into the Mediterranean, with up to 700,000 cm/d of untreated effluent and wastewater being disposed of at sea. Such widespread dumping has had a serious environmental impact. In rural areas, aquifers and surface water supplies have been heavily polluted, with saline content at up to 5,000 parts per million. Polluted seawater is also an issue for the local desalination industry, which has had to contend with serious fouling. Privately, government officials have warned against bathing in the sea near populated areas due to the risk of water-bound diseases.

Lack of investment in new capacity has made things worse. In the two years up to 2010, the sector saw relatively little project activity, despite the need to build new capacity to serve the growing popu-lation. The General Water & Wastewater Company (GWWC), which is also known as the General Company for Water & Sanitation (GCWS), awarded only one major contract, which covered a E110m ($150m) water treatment plant at Tripoli. This was despite its announcement, in 2008, that it would tender about 140 projects between 2009 and 2015 under a $5bn upgrade programme. In August 2010, GWWC held a forum with prospective contractors to discuss the projects, in a sign that the programme might be about to proceed. However, as of

“A significant amount of untreated sewage is dumped in rural areas or into the sea”

late 2010, it had still not awarded the main consultancy contracts or any of the construction deals.

Other government agencies had similar problems in turning their plans into actual projects. In 2005, the National Infrastructure Development Plan (NIDP), drawn up by the Housing & Infrastructure Board (HIB), was launched to upgrade infrastructure nationwide.

The UK’s Biwater was one of the first beneficiaries. In 2005, it won three con-tracts worth an estimated $70m to build 14 small-scale wastewater treatment plants in the Jabal Akhdar region. It fol-lowed this up in 2007, with the e110m contract to build a new wastewater treat-ment plant in Tripoli, along with associ-ated pumping stations and 14 kilometres of pipelines.

Contractors had expected a steady flow of contracts to follow under the NIDP plan, but in late 2007, the plan was halted as

Major wastewater plants

cm/d=Cubic metres a day. Source: Government of Libya

Sebha47,000 cm/d

Sirte26,400 cm/d

Misurata24,000 cm/d

Benghazi54,000 cm/d Tobruk

33,000 cm/d

Tripoli B110,000 cm/d

Tripoli C110,000 cm/d

Zuara41,500 cm/d



part of a government restructuring. How-ever, HIB did proceed with some of the planned projects. In 2009, Biwater had been expected to win two larger contracts to manage the water infrastructure in both Tripoli and Benghazi, under a deal that would also have involved providing engi-neering and construction services to the GWWC. However, the contracts were not awarded, due mainly to bureaucracy and internal wrangling.

The biggest wastewater client in recent years has been HIB, which awarded some $5bn worth of housing and infrastructure contracts up to late 2010. In addition to the infrastructure contracts, most of which contained a wastewater element, HIB made a handful of dedicated sewage treatment plant awards to the likes of Austria’s Wabag, South Korea’s Kolon Engineering & Construction and Singa-pore’s Salcon Engineering, a subsidiary of Singapore’s Boustead.

The HIB projects also faced difficulties. In some cases, deals took up to 18 months to be awarded. Even then, contractors reported that they were unable to mobi-lise on certain projects as the sites were not handed over to them. This affected Kolon Engineering & Construction on both the Ain-Zara and the Tripoli sewage projects, India’s Simplex Projects on the Al-Marj township scheme, and India’s Punj Lloyd on its contract to install sew-erage and stormwater drainage at Souk

Selected Housing & Infrastructure Board contract awards, 2007-10

Contract Scope AwardedValue ($m) Contractor

Scheduled completion (original)

Tripoli and Benghazi infrastructure network

Laying pipes for water supply, construction of sewage system and roads, lighting, aquifer development, associated facilities

Q1 2008 1,250 Tennessee Overseas Construction Company

Q3 2010

Tajoura infrastructure modernisation

200km of infrastructure, including sewage pipes for new wastewater system

Q1 2008 640 Strabag Unknown

Al-Beida infrastructure Public service networks over 2,200 hectares, such as telephone, gas, drinking water, wastewater and power lines

Q4 2009 545 Sacyr Q1 2013

Tripoli and Misurata infrastructure

Electricity, sewer, telephone and water networks Q3 2009 490 Impregilo Q2 2011

General infrastructure 600km of sewage lines, 450km of water lines, 600,000 square metres of sidewalk lighting and 400km of roads

Q1 2010 413 Nemzetkozi Vegyepszer Q1 2013

Benghazi infrastructure Public service networks over 2,200 hectares including telephone, gas, drinking water, power and wastewater lines

Q4 2009 400 Sacyr Q1 2013

Infrastructure works at Zuara, Ragdaleen and Al-Jamail

Roads, water lines, wastewater networks, electricity grids, telephone lines and associated works

Q3 2009 392 Punj Lloyd Q4 2011

Souk al-Juma utilities Water, sewage and stormwater drainage networks and electricity lines

Q1 2009 276 Punj Lloyd Q2 2012

New township in Al-Marj municipality

1,164 single-storey, semi-detached houses with municipal water supply, sewage networks and utilities

Q3 2007 230 Simplex Projects Q1 2010

Arada township infrastructure

Construction and upgrade of general infrastructure Q3 2007 180 Punj Lloyd Q1 2010

Ain-Zara sewage treatment plant

50,000-cm/d pumping station and sewage treatment plant

Q2 2009 135 Kolon Engineering & Construction Company (South Korea)

Q3 2012

Tarhouna township water supply and wastewater infrastructure upgrade

Upgrade of water and wastewater service networks and construction of new water and wastewater service networks, pumping stations and additional water treatment plants

Q2 2008 130 Salcon Engineering Q2 2010

Al-Guarchia sewage plant renovation, Benghazi

Renovation of existing sewage treatment plant to 150,000 cm/d

Q1 2008 122 Wabag Q3 2010

Al-Azharat development infrastructure works

Roads, wastewater, water and telephone lines Q2 2009 93 Lotte Engineering & Construction (South Korea)

Q1 2013

Tripoli sewage treatment plant

Construction of a 60,000-cm/d treatment plant Q4 2008 86 Kolon Engineering & Construction

Q1 2011

Zenzour pumping stations Construction of 16 pumping stations and renovation of main sewer

Q1 2008 41 Wabag Q1 2010

cm/d=Cubic metres a day. Sources: MEED Insight, MEED Projects



“Payment has proved to be a real issue for contractors working in the local wastewater sector”

al-Juma, near Tripoli. Others fared even worse. Salcon was forced to cancel one of its contracts in 2009, involving the upgrade of the Tarhouna water supply and wastewater system, following a failed attempt at price renegotiations made by its parent company on a separate con-struction project.

Over the years, payment has proved to be a real issue for contractors operating in the local wastewater sector. In September 2010, several firms reported that the cen-tral government had halted payments to local clients on a number of large-scale projects as part of a spending review of

the past five years. Indeed, one of the larg-est European players in the market warned that it would significantly reduce its local presence unless the situation was resolved swiftly and projects were reactivated.

Planning, or rather the lack of it, seriously handicapped the development of the wastewater sector. To address the issue, the Swedish office of the UK’s WSP was contracted to draw up a masterplan for the country’s water supply and sewage systems. Working alongside the local National Consulting Bureau, the project involved a complete review of existing water and wastewater supplies and infra-

structure, along with recommendations for meeting water and wastewater demand up to 2025. It was finally com-pleted in early 2010, although no details on the findings were released.

Following the end of hostilities in Octo-ber 2011, the initial indications were that there had been only limited damage to wastewater infrastructure. However, this was of little consolation to a sector that was already in a poor state of repair before the civil war and that desperately needed an integrated and comprehensive approach to its rehabilitation.



Compared to its neighbours, Libya’s non-oil industrial base is limited and

focused on cement and metals. This in part reflects the small size of the Libyan market, but also highlights the lack of for-eign investment in the non-oil economy and the painfully slow decision-making process during the Gaddafi era.

CementPrior to February 2011, Libya’s cement sector was preparing for a huge expansion, with some 18 million tonnes a year (t/y) of new capacity planned. The new plants were to be built by European, Middle East, African and local investors and formed part of the strategy by the General People’s Committee for Industry, Economy & Com-merce and the National Mining Corpora-tion to significantly expand sector activity. However, none of the new plants had entered construction before the outbreak of civil war, which also forced all existing cement factories to halt production.

Industry

na=Not available; JLCC=Joint Libyan Cement Company. Sources: Arab Cement Union, MEED Insight

Years of sanctions and poor maintenance have meant that installed cement capac-ity, estimated at 10.4 million t/y, has oper-ated well below design.

Actual production was understood to be no more than 4-5 million t/y in 2010, due to the age of many plants. For example, the local Arab Cement Company, which owns four plants in the country, says that its Al-Marqab factory, which began produc-tion in 1969, produced in 2010 about 240,000 t/y, some 100,000 t/y below design

“Prior to February 2011, Libya’s cement sector was preparing for a huge expansion [of capacity]”

Existing cement plants

Owner Plant Design capacity (t/y) Year commissioned

JLCC Benghazi 800,000 1972

JLCC Al-Hawri 1,000,000 1978

JLCC El-Fatayah 1,000,000 1984

Arab Cement Company Zliten 1,000,000 1984

Arab Cement Company Al-Marqab (Khoms)

330,000 1969

Arab Cement Company Souk al-Khamis 1,000,000 1977

Arab Cement Company Libda 1,000,000 1981

Arab Union Contracting Company

Burj 1 1,400,000 2005


Burj 2 1,400,000 2009

Al-Nisr Cement Company Tripoli 1,400,000 na

Total design capacity 10,330,000



Historically, the sector has been domi-nated by two state-run organisations, Lib-yan Cement Company in the east and Arab Cement Company in the west. The two commissioned seven plants in the 1970s and 1980s, with a significant amount of their capacity directed to meet the requirements of the Great Man-made River (GMR) project.

However, since 2000, two new players have entered the market. The first was state-owned Arab Union Contracting Company (AUCC), a leading local con-tractor, which decided to capitalise on the cement shortage in the country. It commissioned its first cement plant, the 1.4 million t/y Burj line, in 2005 and added a second line of the same capacity in 2009. AUCC was joined by Tripoli-based Al-Nisr Cement Company, which opened a 1.3 million t/y plant.

Cement has been one of the few manufac-turing sectors to have experienced some privatisation. In 2007, Austrian materials manufacturer Asamer, in joint venture with the Economic & Social Development Fund (ESDF), acquired 90 per cent of the shares in Libyan Cement Company, with the remaining 10 per cent being granted to the employees. Following the acquisi-tion, the company’s name was changed to the Joint Libyan Cement Company (JLCC).

The main goal of the privatisation was to modernise three plants in Benghazi,

Al-Hawri and El-Fatayah and increase their output. Prior to the civil unrest, JLCC had installed bag filter systems at all three plants, which prevented serious dust pollution that had affected the sur-rounding areas for years. It had also planned, but not completed, to:

• implement and start production of limestone blended cement

• install and dispatch cement in large bags• open cement retail shops, to be known

as ‘Sales Express’, in order to supply bagged cement directly to end users

• install and open a silo terminal for bulk cement in eastern Libya

• gain the Conformite Europeene mark for exporting

• commence the Al-Hawri cement plant line upgrade

“The sector has been dominated by Libyan Cement Company and Arab Cement Company”

Cement producers by design capacity

Arab Cement Company

2.8

1.4

%Arab Union Contracting Company

Al-Nisr Cement Company

2.8

3.3

(Million t/y)

t/y=Tonnes a year; JLCC=Joint Libyan Cement Company. Source: MEED Insight

t/y=Tonnes a year; na=Not available; ESDF=Economic & Social Development Fund; JLCC=Joint Libyan Cement Company. Source: MEED Insight

Local cement producers

Company Type Plants Capacity (million t/y)

Arab Cement Company State-owned, formerly known as Al-Ahlia Cement Company

Benghazi, Al-Hawri, El-Fatayah

3.3

JLCC Joint venture of ESDF and Asamer

Zliten, Al-Marqab, Souk al-Khamis, Libda

2.8


State-owned contractor Burj lines 1 and 2 2.8

Al-Nisr Cement Company na Tripoli 1.4

JLCC



Following the outbreak of the civil war, in February 2011, Asamer evacuated its expatriate staff and all of JLCC’s plants were shut down to prevent any damage being caused through the disruption of power supplies. Local staff subsequently reported major damage and confirmed that gas supplies had been interrupted during the conflict. However, production was expected to resume by the end of 2011, provided power supplies could be restored.

Asamer estimated local cement demand at 3.5-4 million tonnes in 2010 and was forecasting a similar level in 2011, before hostilities began. This represented a fall from the 2007 peak of about 6 million tonnes, when the re-opening of the coun-try after years of sanctions led to a surge in cement demand.

As highlighted by Asamer, the local cement industry has attracted growing interest in recent years, with investors looking to take advantage of low energy and production costs to meet local and overseas demand. As of late 2010, licences had been granted for up to 18 million t/y of new capacity.

The largest project planned was a 4 mil-lion-t/y plant at Tobruk. Costing an esti-mated $750m, the plant was under devel-opment by Italian cement giant Italcementi in conjunction with ESDF. Feasibility studies were concluded in

“Over the long term, demand is set to increase, given the infrastructure needs of the country”

t/y=Tonnes a year. Sources: USGS, MEED Projects

2010 and construction was scheduled to start in 2013. Licences had also been granted to the ESDF-owned Alhadena National Company for the Building Mate-rials Industry to construct plants at Nalout and Al-Jufra, to local contractor Aska al-Ramada Construction for a cement line at Wadi Zaza and to Dubai-based real-estate developer Emaar for a new cement facility at Zliten.

However, all the projects were put on hold at the start of 2011 and it remains unclear how quickly they will be reacti-vated. This is especially the case with the host of plants planned by Libyan Invest-ment Authority subsidiary ESDF, which was one of the most politicised organisa-tions under the Gaddafi regime.

Over the long term, demand is set to increase given the infrastructure needs of the country. International expertise will also be vital in rehabilitating the state’s older cement plants.

Licences granted for new cement capacity

Plant Main investor Capacity (million t/y)

Tobruk Italcementi 4

Wadi Shati Cement African Company 1

Nalout and Al-Jufra Alhadena National Company for the Building Materials Industry

2

Ajdabiya Cemena Libya 2

Misurata Cemena Libya 2

Wadi Zaza Aska al-Ramada Construction 1.5

Al-Marj (Zliten) Emaar 1.5

Misurata Libya Africa Investment Portfolio 2

Karsah Libya Africa Investment Portfolio 2



Steel and aluminiumLibya’s metals industry is concentrated in the Mediterranean port city of Misurata, The city plays host to one of North Afri-ca’s largest integrated steel complexes. Owned by the national Libyan Iron & Steel Company (Lisco), the Misurata steel plant was supposed to symbolise Libya’s economic progress, but it became a key battleground in the recent civil war.

Although its foundation stone was laid in 1979, it was not until 1990 that molten steel was first produced at Misurata. A second phase expansion was completed in 1997. Lisco has molten steel capacity of 1.34 million t/y and produces a wide range of products through its mills and melt shops. Nearly all of its rebar produc-tion is consumed locally, while most of its flat products are exported to southern Europe. The company has also exported some of its hot briquetted iron (HBI) pro-duction in recent years.

Lisco imports all of its iron pellets from abroad, mainly from Sweden and Brazil. The company benefits from low-cost gas feedstock, which has helped offset the ris-ing prices of raw material imports. The gas is supplied to the steel complex’s cap-tive power plant, which has capacity of 510MW.

Two international companies have played key roles in the construction and develop-

“Nearly all of Libyan Iron & Steel Company’s rebar production is consumed locally”

HBI=Hot briquetted iron; DRI=Direct reduced iron; t/y=Tonnes a year. Source: Lisco

ble, with the plant ultimately being able to produce 2.1 million t/y of rods and bars and a similar quantity of billets, blooms and slabs.

In a major shift, Lisco turned to private investors to assist in funding the esti-mated $2bn upgrade programme. In the autumn of 2010, the firm hosted a private investment workshop to outline its plans, which was attended by both local and international firms.

However, the expansion plans were placed on hold and the plant shut in Feb-ruary 2011, when Misurata became a major battle site in the civil war. Many of Lisco’s estimated 6,000-strong workforce were involved in the civil unrest, while the plant itself suffered some damage.

Libyan Iron & Steel Company facilities

Facility Products Volume (t/y)

Direct reduction plant HBIDRI

650,0001,100,000

Steel melt shop 1 Billets and blooms 630,000

Steel melt shop 2 Slabs 611,000

Bar and rod mills (2) Rebar 800,000

Light and medium section mill Light and medium sections 120,000

Hot strip mill Hot rolled coils and sheets 580,400

Cold rolling mill Cold rolled coils and sheetsGalvanised coilsColour coating line

140,00080,00040,000

ment of the Misurata complex. India’s MN Dastur & Company has undertaken numerous engineering assignments at the site and had to evacuate 66 members of its staff in March 2011, following the out-break of hostilities. Lisco’s main contrac-tor has been Austria’s VAI, which is now part of the Siemens group.

Lisco’s production rates have varied in recent years. Total production of direct reduced iron (DRI) was estimated at 1.6 million t/y in 2008, but this fell to 1.1 million t/y in 2009, which Lisco attributed to the drop in demand caused by the global financial crisis. Figures col-lected by Arab Steel for the first half of 2010 show that DRI output increased by 79 per cent to 753,000 tonnes, bringing production close to 2008 levels.

Despite fluctuating demand, a series of upgrades have been carried out by Lisco over the past decade. It commissioned an expansion of the strip pickling line in 2005, followed by new drawing, galvanis-ing and colour coating lines in 2007. Under plans approved in August 2007, molten steel production was set to increase to 4.2 million t/y by 2015. The plan included a new 1.8 million t/y cold direct reduced iron (CDRI) facility at the existing direct reduction plant. Other facilities were to be expanded, with HBI production set to increase from 630,000 million t/y to 850,000 million t/y and melt shop capacity to more than dou-



t/y=Tonnes a year; Lisco=Libyan Iron & Steel Com-pany; JLCC=Joint Libyan Cement Company. Source: MEED Insight

Existing steel and cement plants

LocationType of plant

Producer name

Design capacity

Misurata Steel Lisco 1.3 million t/y

Benghazi Cement JLCC 800,000 t/y

Al-Hawri Cement JLCC 1 million t/y

El-Fatayah Cement JLCC 1 million t/y

Zliten Cement ACC 1 million t/y

Al-Marqab Cement ACC 330,000 t/y

Souk al-Khamis

Cement ACC 1 million t/y

Libda Cement ACC 1 million t/y

Burj Cement AUCC 2.8 million t/y

Tripoli Cement Al-Nisr 1.4 million t/y

Following the end of the war in October 2011, Lisco said that its biggest challenges in resuming production were securing staff and ensuring adequate electricity supplies. Officials also maintained that the search for private investors would restart once the political situation had stabilised.

Given the high volumes of electricity required to produce steel, it will be some time before Lisco can again operate at full capacity, although it should be able to restart some of its rolling mill operations sooner. Until then, the country will rely on imports from Turkey, Italy, China and other markets.

Russian aluminium giant Rusal for a 600,000 t/y smelter joint venture. While the Kletsch initiative was always consid-ered speculative, the Rusal project was taken far more seriously, particularly after

AluminiumTripoli has long had ambitions to develop an aluminium industry to take advantage of its low-cost gas feedstock and further develop its metal production base. How-ever, despite a burst of activity in 2008, the country still has no smelting capacity.

In January 2008, the UK’s Klesch & Com-pany signed an estimated $8bn joint ven-ture agreement with the Libyan African Investment Portfolio for the construction of a 725,000 t/y smelter to be completed by 2011. This was followed nine months later by the signing of a memorandum of understanding between the ESDF and

the Libyan Investment Authority became an investor in the Russian conglomerate, following the floatation of 10.6 per cent of the firm’s shares on the Hong Kong Stock Exchange in January 2010.

A third aluminium project was also under discussion in 2008. Canada’s Rio Tinto Alcan confirmed that it was in talks with the government to build a $2.5bn, 360,000 t/y smelter. However, like the two other projects, no contracts were signed prior to the civil war and Rio Tinto declined to comment in October 2011 about its future intentions in Libya.

“Libyan Iron & Steel Company should be able to restart rolling mill operations soon”

EGYPT

NIGER

TUNISIA

LIBYA

CHAD

SUDAN

Tripoli

Misurata

Al-Marqab

Souk al-Khamis Zliten

Burj

Libda

BenghaziAl-Hawri

El-Fatayah

Existing steel and cement plants

Cement plant

Steel plant




In January 2011, hundreds of protesters stormed buildings under construction in

the cities of Beni Walid and Benghazi. The protests were fuelled by growing popular resentment at the lack of public housing, lengthening waiting lists and seemingly rampant corruption within the system.

Despite promises and huge sums being pledged, the local housing sector has never kept up with demand in Libya. The provi-sion of housing was declared a right for all by Muammar Gaddafi, shortly after he seized power in 1969 and was subsequently enshrined in the Green Book. However, translating words into action proved much more difficult, particularly when the oil price crashed in the 1980s.

During the 1980s, some houses were built by the government under its Priority Hous-ing Programme (PHP), but a large propor-tion of Libyans opted to build their own properties on land allocated to them by the

Housing and real estate

government using low-cost loans. This route became much more difficult to follow from the mid-1980s onwards, when loans dried up and building materials became much more expensive.

Financial austerity forced the government to change its policy. No longer would the state provide housing for all, but it would assist private developers by encouraging banks to lend to individuals wishing to buy or build their own property. But again there were major problems. The Secretariat for

“Despite huge sums being pledged, the local housing sector has never kept up with demand”



Housing was scrapped, creating a void in both policy and planning. Shortages of bank finance, construction materials and contractors further exacerbated the housing shortage.

By the early 1990s, the housing situation was becoming acute. In response, the Gen-eral People’s Committee for Housing & Util-ities (GPCHU) was formed in 1993 and the General Housing Corporation (GHC) was set up to plan and deliver new housing. After being disbanded in the early 1980s, housing cooperatives were also re-established, which helped their members to secure land, finance and materials for housing projects.

One of GPCHU’s first tasks was to look at housing requirements over the short, medium and long term and set targets and budgets for investment. The forecasts were based on estimated population growth of 3 per cent a year and a housing deficit of 73,387 units in 2000. To meet demand, GPCHU concluded that Libya needed 465,988 new housing units in the period 2001-15.

Data on how many of these units were actu-ally constructed is difficult to obtain, but it is clear that the new housing stock and financial allocations failed to satisfy demand. In 2005, the General Committee for Planning & Finance sharply increased the new housing requirement figure, stating that 420,000 new homes were needed by 2010. More recently, independent studies

have put the estimated shortfall at about 500,000 units by 2020.

Prior to the outbreak of the civil war in Libya, there had been an increase in the volume of major housing contracts by the two main government agencies, the Hous-ing & Infrastructure Board (HIB) and the Organisation for the Development of Administrative Centres (Odac). HIB was given the task of delivering 200,000 new homes, with supporting infrastructure, by 2020 and had appointed the US’ Aecom to oversee the programme in 2007.

Before the war, an estimated $11bn worth of housing projects were under construc-tion, involving more than 60,000 units. The largest by far was the 25,000-unit Benghazi new town project, which was being built by China State Construction Engineering Cor-poration at an estimated cost of $6bn. In addition, there was a significant volume of housing-related infrastructure contracts under execution.

Historically, Turkish contractors have car-

“Before the war, an estimated $11bn worth of housing projects were under construction”

Sources: Meeting Housing Needs in Libya, 2007; Abdulsalam Ahmed Abdalla, Newcastle University UK, Report on Housing Programmes, GHC, 2000

Source: Aecom

The 2001-15 housing plan

Long-term planTargeted number

of new housesNumber of units

to be built a year Cost (LDm) Cost ($m)

2001-05 214,200 42,840 6,242 5,205

2006-10 117,190 23,438 3,768 3,053

2011-15 134,598 26,920 4,345 3,520

TOTAL 465,988 31,066 16,368 13,263

Key elements of the Housing & Infrastructure Board programme

Large-scale housing projects 26, consisting of 115,000 units

Small-scale local housing projects 85,000 units, mainly in southern communities

Infrastructure projects to support housing

146

Main elements of infrastructure projects

10 million square metres of roads, 1,200 kilometres of sewage pipes, 1,300km of water mains, 2,000km

of stormwater drainage, 1,000km of electrical conduit, 1,000km of telecoms cabling, 714 pumping stations and

173 sewage treatment plants



ried out the majority of housing projects in Libya with the likes of TML Construction, Mesa Mesken, STFA and Enka building thousands of units across the country. Their main competitors have traditionally been Korean firms. However, in recent years, Chinese, Malaysian and Indian contractors have entered the housing and related infra-structure market, with China State Con-struction, India’s Punj Lloyd and Simplex Infrastructure, and Malaysia’s Ranhill all winning major awards.

The housing programme was put on hold in early 2011 and it is unclear when it will be restarted. Questions remain about whether some projects, including the new Benghazi project that was being carried out by the Chinese, will even be reactivated at least in their original form.

Officially, the National Transitional Coun-cil (NTC) has told contractors and consult-ants that it plans to honour existing con-tracts and that housing is a priority. However, as of November 2011, firms were still waiting to hear what payments would be made available before they return to work and what compensation would be offered for the millions of dollars worth of equipment, vehicles and materials looted during the conflict.

Aecom was hard-hit by the civil war. It announced in mid-2011 that it had lost an estimated $10m from costs involved in leaving Libya at the start of the conflict.

“Historically, Turkish contractors have carried out the majority of housing projects in Libya”

HIB=Housing & Infrastructure Board; Lidco=Libyan Investment & Development Company; Odac=Organisation for the Development of Administrative Centres. Source: MEED Insight

Selected major housing contracts under construction, late 2010

Project Value ($m) Contractor Scope Client

Tripoli housing 800 Saraya Construction 400 housing units in 19

towers

Edkar Bank

Ghira housing 415 Simplex Infrastructures 2,000 housing units

HIB

Tajoura housing 413 Amona Ranhill Consortium

10,000 apartments

HIB

Benghazi housing 774 Amona Ranhill Consortium

20,000 apartments

HIB

New Benghazi housing 6,000 China State Construction Engineering Corporation

25,000 housing units

HIB

Tripoli housing 413 Amona Ranhill Consortium

10,000 apartments

HIB

Tobruk housing 996 Sungwon 5,000 housing units

Lidco

Sirte city housing 50 NACO Construction & Trading Company

100 housing units

Odac

Sebha housing 300 CKG Engineering 4,000 new housing units

Odac

Souk al-Ahad housing 256 STFA 2,000 new housing units

Odac

Suluk and Al-Mijineen housing

476 SMI Hyundai 7,000 new housing units

Odac

Qubah City 420 AMCO 2,000 new housing units

Odac



Real estate and tourismCommercial real estate is a relatively new proposition for Libya. A range of tourism-related schemes were planned in the period 2006-08, many of them by Gulf developers, but none had made much progress before being reined in, firstly by the 2009 economic downturn and Gulf property slump and then by the civil war. Even schemes funded by local investors had been slow to progress.

Tripoli Greens, a $4bn governmental com-plex with the involvement of numerous international architects, was halted in 2008/09 with little explanation. Similarly, the $3bn Green Mountain tourism and development had made little progress, despite being personally launched in Sep-tember 2007 by Gaddafi’s son Saif al-Islam and employing the UK’s Fosters & Partners as masterplanners.

Some smaller real-estate projects seemed to have fared much better than the vast developments planned by the likes of Dubai-based Emaar, Bahrain’s Gulf Finance House and Qatar’s Barwa Real Estate. For example, Athens-based Con-solidated Contractors International Company (CCC) had been contracted to build two tower blocks on the Tripoli shoreline near the Corinthia Hotel by the Economic & Social Development Fund (ESDF). Both had been progressing well prior to the war.

ESDF=Economic & Social Development Fund; Lidco=Libyan Investment & Development Company; CCC=Consolidated Contractors Company; Odac=Organisation for the Development of Administrative Centres. Source: MEED Projects

Selected major real-estate and tourism projects

Project Value ($m) Pre-war status Scope Client

Energy City 5,000 Planned Business district for energy industry Gulf Finance House with ESDF

The Waterfront 250 Planned Luxury residential development with five-star hotel

Al-Libya al-Qataria

Barwa mixed-use development

2,000 Planned 3,000-square-metre mixed-use development

Barwa

Sports and service complex 204 Planned Hotel and leisure complex Barwa/Lidco

Berjaya Golf Complex 227 Under construction by Daewoo

Golf course, villas and Mariott hotel Berjaya Oyia Development with ESDF

Corinthia Hotel, Benghazi 136 Planned Five-star hotel in Benghazi International Hotel Investments with Libya Arab Foreign Investment Company (Lafico)

Zuara Economic City 15,000 Planned Tourism development over 40 kilometres of coastline

Emaar

Tripoli Towers 800 Under construction by CCC

Two towers, one 48-storey, one 30-storey

ESDF

Al-Waha 750 Planned 11 residential towers and one commercial tower

Lidco/Al-Maabar Real Estate Company

Tripoli Greens 4,135 On hold New government congress complex Odac

Despite the lack of progress and the civil war, real estate has considerable poten-tial in view of Libya’s largely undevel-oped Mediterranean coastline and world-class tourism sites. Developing tourism infrastructure at its ancient Greek and Roman sites, most notably Leptis Magna and Sabrata, would assist in economic diversification and create much-needed jobs. However, the government estimated in 2010 that there were only 14,000 hotel rooms in Libya. As part of a plan to boost tourism revenues from $7.9bn in 2009 to $22bn by 2019, Tripoli was plan-

ning to raise the number of hotel rooms to 50,000.

It is a similar situation in the commercial sector. Prior to the war, demand was rising from an increasing number of joint ven-ture companies servicing the oil and gas, construction and financial sectors. Top-quality office space was only available in three buildings in Tripoli: Five Towers, Al-Fateh Tower and the Corinthia Busi-ness Centre, which was built alongside the Corinthia Hotel. All three, however, were operating at 100 per cent occupancy.

“The government estimated in 2010 that there were only 14,000 hotel rooms in Libya”



EGYPT

NIGER

TUNISIA

LIBYA

CHAD

SUDAN

Tripoli

Tourist sites

Sources: Lonely Planet, www.tomehu.com

The Awbari lakes

Adiri

Garama

CyreneApollonia

Waw an-Namous

Ghadames

Tadrart Acacus

FarwaZuara

Leptis MagnaSabrata

Nalout



EducationDuring Muammar Gaddafi’s rule, all Libyans were eligible for free education, which was provided by the state. Between the ages of six and 15, it was compulsory for children to attend school, where the curriculum was overwhelmingly focused on Gaddafi’s political philosophy, Arabic and Islamic studies. In the latter years, it also included compulsory military train-ing and during the 1980s, the teaching of Russian instead of English.

An educational reform programme, launched in 2005, was accompanied by a 19-year ban on the teaching of English being lifted and significant new invest-ment going into higher education. In 2006, the government drew up a five-year plan to upgrade and expand education facilities. Its centrepiece was the con-struction of about 30 new university cam-puses, in a programme overseen by the Organisation for the Development of

Social infrastructure Administrative Centres (Odac). The uni-versity programme was one of the largest in the Middle East, second only to Saudi Arabia’s in terms of value.

Compared with many other infrastructure projects in Libya, the university building programme progressed relatively smoothly and rapidly. In July 2009, US consultant Hill International was awarded the project management contract for what became known as the 25 university programme, as well as for the $2.5bn Al-Fateh University

Mena university investment

Country Investment value ($bn)

Saudi Arabia 19.4

Libya 7.5

Kuwait 5.87

Qatar 7.04

UAE 1.95

Mena=Middle East and North Africa. Source: MEED Projects



expansion, which was already under way. At least four more – located at Sirte, Azzawiya, Ghadames and Ras Lanuf – were under way, but fell outside of Hill’s responsibilities.

The Al-Fateh University project was by far the largest. It involved the expansion and redevelopment of the existing univer-sity in Tripoli, through the construction of about 65 new buildings. As of early 2011, it was about 60 per cent complete, with numerous contractors, including Turkish firms Guris and Mesa Mesken, working on the development.

On the 25 university programme, all buildings were either under design or in the construction phase as of early 2011. For the designs, the client split the pro-gramme into four packages.

The Argus Alliance, made up of UK firms Arup, Davis Langdon and Keppie Design, had the contract to design 12 universities. Contractors had been appointed for six of these: Mesa Mesken for Omar al-Mukhtar University at Derna, the local/Italian joint venture of Libyan Investment & Develop-ment Company (Lidco) and Impregilo for Misurata University’s Zliten and Tarhouna campuses, China Building Technique Group for Omar al-Mukhtar University at Tobruk, a contractor identified as Way-2B for the Misurata University’s campus at Khoms, and Turkey’s Arsel for Garyounis University campus at Al-Marj.

A further 10 campuses in the west of the country have been designed by the UK’s BDP. All had main contractors on board. These included China’s Changjiang Geo-technical Engineering Corporation, Kuwait’s Gulf Group Construction Com-pany, Turkey’s Akdeniz, Spain’s Bruesa Construccion, South Korea’s Cosmo and Turkey’s BTK.

Spain’s Idom designed the Misurata University campus at the coastal city for which construction was under way by the Lidco/Impregilo partnership. The fourth design package was being carried out by the UK’s RMJM and covered the Zliten campus of Al-Asmariya University and the Misurata University campus at Beni Walid.

Following the end of the civil war in October 2011, Hill was preparing to con-duct a damage assessment of each site and draw up an inventory for materials and equipment lost. Odac had also indicated its desire to restart the programme and

“Ten university campuses in the west of the country have been designed by the UK’s BDP”

Odac=Organisation for the Development of Administrative Buildings; tba=To be announced; Lidco=Libyan Investment & Development Company; JV=Joint venture. Source: MEED Insight

Selected projects on Odac’s university and campus building programme

Location University Designer Contractor

Ajdabiya Garyounis Argus tba

Awbari Sebha BDP Changjiang Geotechnical Engineering Corporation

Beni Walid Misurata RMJM tba

Birak Sebha BDP Changjiang Geotechnical Engineering Corporation

Derna Omar al-Mukhtar Argus Mesa Mesken

Garyounis Garyounis Argus tba

Gharyan Al-Jabal al-Gharbi BDP Akdeniz

Houn Sirte Argus Unknown

Al-Tahadi Sirte Argus Dogus

Misurata Misurata Idom Impregilo/Lidco

Murzuq Sebha BDP Changjiang Geotechnical Engineering Corporation

Nalout Al-Jabal al-Gharbi BDP Cosmo

Nasser Nasser Argus tba

Sebha Sebha BDP Changjiang Geotechnical Engineering Corporation

Sabrata Al-Jabal al-Gharbi BDP Gulf Group Construction Company

Sorman Al-Jabal al-Gharbi BDP Bruesa Construccion

Tarhouna Misurata Argus Impregilo/Lidco

Tobruk Omar al-Mukhtar Argus China Building Technique Group

Zintan Al-Jabal al-Gharbi BDP BTK

Zliten Al-Asmariya RMJM tba

Zliten Misurata Argus Impregilo/Lidco

Zuara Al-Jabal al-Gharbi BDP Bruesa Construccion

Al-Beida Omar al-Mukhtar Argus tba

Jifarah Al-Fateh Argus Maltauro

Khoms Misurata Argus Way-2B

Al-Marj Garyounis Argus Benaa & Tasheed/Arsel JV



make payments as soon as it had the authority to do so.

The damage to schools in some areas was extensive, since many were used by military forces as bases, which in turn became targets of the bombing campaign. Those hardest hit were located in villages between Ajdabiya and Benghazi, in Zliten and Sebha, and in parts of Tripoli. A clearer idea of the damage to schools is expected once Unicef and Paris-based charity ACTED complete an assessment.

Education is a priority for the National Transitional Council (NTC). Its focus will not just be on rebuilding damaged infra-structure and relaunching pre-conflict projects. It will also look to overhaul the curricula and staffing, which became highly politicised during the Gaddafi era. It was no coincidence that one of the NTC’s first moves on the education front was to appoint Faisal Kreshki as the new dean at Al-Fateh University, which had been renamed the University of Tripoli.

“The hardest hit schools were located in Zliten and Sebha, and in parts of Tripoli”



HealthcareLibya’s health sector has been the area most severely affected by the civil war. From the destruction of primary health centres to overwhelmed hospitals and an exodus of medical professionals, the already strained system was close to breaking point when the end of hostilities was announced in October 2011.

The local healthcare system is almost entirely state-dominated, with just a few small private clinics. According to the World Health Organisa-tion (WHO), the country had some 23,000 hospital beds, 96 hospitals and 1,424 primary health centres prior to the conflict and employed more than 113,000 healthcare professionals.

The public healthcare system is four-tiered. It starts with the primary health centres, which typically serve a catchment area of 5,000-10,000 people. Under the structure, patients are then either referred to the 45 specialist clinics spread across the country or district hos-pitals. If necessary, they are transferred to advanced or teaching hospitals for fur-ther treatment.

Most residents tend to go directly to the hospitals, thus bypassing the primary health clinics. Those that can afford to generally seek treatment overseas, so as to avoid the staff shortages, overcrowding and inefficiency that have become a fea-

Source: WHO Country Co-operation Strategy Libya, 2010-15

ture of the public healthcare system. Residents in need of specialist care drive mainly to Tunis, or Cairo, or fly to Malta, Germany or the UK.

The healthcare system has suffered from a lack of investment and 15 years of inter-national sanctions. A major issue has also been the fact that the system has been run at the regional or Shabiat level without sufficient clear policy guidance from the central government. Frequently, minis-tries have appeared to give out conflicting

Hospitals and health centres

Type of facility Number

Specialised hospitals 25

Central hospitals 18

General hospitals 21

Rural hospitals 32

Total number of public hospitals

96

Total beds in public hospitals 20,289

Total beds in welfare clinics 1,060

Total beds in private clinics 1,433

Total beds in all hospitals 22,782

Beds per 10,000 population 37

Primary healthcare facilities 1,424

Polyclinics 37

Quarantine units 17



policy advice. For example, in the 2009 budget, the Finance Ministry said it wanted to build a series of major public hospitals, while the Health Ministry said that the pol-icy focus should be on primary healthcare, rather than large physical infrastructure.

To stem medical tourism and improve local healthcare expertise, former prime minister Al-Baghdadi Ali al-Mahmoudi announced a $500m investment pro-gramme in 2006, aimed at attracting inter-national consultants and universities to Libya. This led to a raft of partnership agreements being signed.

In May 2008, the Libyan Secretary of State for Education & Scientific Research and the UK government signed a memoran-dum of understanding on medical train-ing. This provided for local medical staff to be given a year’s training in the UK’s National Health system, in areas includ-ing endoscopy, while the UK’s Royal Col-leges trained Libyan surgeons in specialist areas, such as obstetrics. In December 2009, the UK’s Liverpool John Moores University secured a contract with Tripo-li’s Al-Fateh Medical University to run degree programmes in nursing, although it was yet to begin as of early 2011.

Training was a particular area of focus for the government. In 2009, the General Peo-ple’s Committee for Health & Environment was established to bring the fragmented system together. One of its first initiatives

was to launch a centralised training pro-gramme and in 2010, it sent 1,170 medical professionals overseas to Jordan, Egypt, Germany, the UK, Malaysia, Singapore, Italy and France for training. It also began to document and report on health indicators and statistics for every hospital, recording information such as the fact that the average Libyan visited a primary health centre three times in 2010.

Recent years have also seen private firms take on a role in the sector, both through

management outsourcing and the establish-ment of non-government facilities. In Janu-ary 2008, the UK’s Healthshare Interna-tional was awarded an LD250m ($197m) contract to manage and modernise the Al-Khadra hospital in Tripoli. Along with providing on-site training, Healthshare was to renovate infrastructure, install a new information technology system, and mod-ernise the management training system.

International expertise was also tapped for the Al-Marg hospital in the northeast of the country. The UK’s International Hospitals Group (IHG) was contracted to commission the new hospital building and brought in 20 senior staff to manage it. IHG was forced to evacuate its expatri-ate staff in early 2011, although following the end of hostilities in October 2011, it was looking to send them back.

Benghazi Medical Centre was expected to be the next institution to follow the out-sourcing route. In 2010, it announced a LD150m ($120m) tender for management and refurbishment.

Small-scale private hospitals were also becoming more common prior to the war, with about 80 in operation. One of the newest was the Libyan European hospital in Benghazi, run by Germany’s Epos Group. Its owners, the Mercantile Group, were planning a sec-ond 200-bed hospital in Tripoli prior to the revolution.

“Recent years have seen private companies take on a role in Libya’s healthcare sector”

Health investment

Source: General People’s Committee for Health & Environment

($m)

0

500

1000

1500

2000

2500

3000

1993

1994

1995

1996

1997

1998

1999

20002001

20022003

20042005

20062007

20082009

2010

3,000

2,500

2,000

1,500

1,000

500

0



Most of Libya’s existing healthcare infra-structure was built in the 1980s and 1990s, and much of it was constructed by eastern European and Korean contractors. One of the biggest players in this period was Bulgaria’s Technoexportstroy, which carried out more than 25 health-related contracts. These included a 500-bed trauma centre in Tripoli, 16 polyclinics and three 201-bed hospitals in Sabrata, Al-Zahra and Sirte.

Project activity slumped in the period 1990-2005, as a result of tight government budgets. However, funding has risen in

Projects under construction

District Number of projects

Albetnan 9

Sirte 9

Misurata 64

Derna 14

Jifarah 7

Al-Marqab 37

Jabal Akhdar 13

Morzig 11

Tripoli 33

Al-Marj 13

Sebha 7

Benghazi 56

Wadi Alhiat 7

Azzawiya 34

Al-Waha 7

Wadi Shati 18

Nalout 8

Kufra 9

Ghat 3

Al-Nequt al-Ghamis 24

Ajdabiya 6

Al-Jabal al-Gharbi 36

Other 6

TOTAL 463

Source: General People’s Committee for Health & Environment

recent years with budgeted health spend-ing reaching an all-time high of $2.6bn in 2010, double the 2007 allocation.

The higher spending was reflected in increased project activity. According to the General People’s Committee for Health & Environment, there were 463 new healthcare facilities under con-struction as of December 2010. These were spread throughout the country, with the biggest concentration located in the Misurata and Benghazi areas. Although many of the projects were small scale and clinics, there were also a handful of large-

scale schemes. Among them was a 200-bed hospital contract awarded to South Korea’s Daewoo Engineering & Construc-tion at a cost of $205m.

The healthcare sector was hit hard during the six-month civil war. Primary health centres were forced to close as staff, fund-ing and supplies failed to arrive. This led to an overwhelming number of people seeking treatment in the hospitals. The most stressed hospitals were in Misurata, along the Ajdabiya to Brega road, Azzaw-iya in the Nafusa Mountains and in and around Tripoli.

Following the end of hostilities, hospitals and health centres desperately needed to replenish their medical supplies and source equipment. Many also faced acute staff shortages, with more than 20,000 health-care workers, most of whom were nurses, having left the country.

The NTC has stated that healthcare will be a key priority moving forward and, with needs in almost every area, from medical supplies and equipment to train-ing and upgrading of facilities, the sector is likely to become the focus of major investment. There is also widespread acknowledgement that after years of international isolation, foreign expertise is needed to transform the sector, which makes it all the more likely that manage-ment contracts and private investment will be a key part of future strategy.



Transport

EGYPT

NIGER

TUNISIA

LIBYA

CHAD

SUDAN

Tripoli

Main airports

Source: World Food Programme

Airport

Airfield

Airstrip

Sebha

Tripoli International

Tripoli Mitiga

Ghadames

Misurata

Sirte

Benghazi

Ghat

Kufra

Libya has 15 civil airports, although only two – Tripoli and Benghazi – have signifi-cant international traffic. The majority of its airports are small, serving outlying communities and handling domestic and charter flights. In addition to the commer-cial airports, there are also a number of private landing strips, generally serving remote oil installations and military bases.

Much of Libya’s airport infrastructure is old, having been built in the 1970s and 1980s. Little investment was made in the 15 years up to 2003, when international sanctions had a major impact on the local aviation sector. However, the industry began to recover after 2004, with growing international investment and tourism activ-ity leading to Libyan Arab Airlines and its sister airline, Afriqiyah Airways, undertak-ing fleet and route expansion programmes.

Airports



Main airports

Location ICAO location indicator IATA location indicator Usage Customs Runway IFR runway Length (feet)

Ajdabiya HLAG Private No Paved No 3,200

Amal V12 HLAM Private No Paved No 5,900

Beda M3 HLBD Private No Paved No 7,400

Benghazi HLLB BEN Civil Yes Paved Yes 11,800

Birak BCQ Civil No Paved No 11,100

Bu Attifel A100 HLFL Private No Paved No 7,000

Dahra HLRA Private No Paved No 5,100

Eddib V7 HLDB Private No Paved No 5,900

Al-Beida HLLQ LAQ Civil Yes Paved Yes 11,800

El-Sider HLSD Private No Paved No 6,800

Fox 3 Private No Unpaved No 6,500

Ghadames HLTD LTD Civil No Paved No 11,800

Ghat HLGT GHT Civil No Paved Yes 11,800

Gialo HLGL Private No Paved No 6,500

Hamada Nc-5 HLHM Private No Paved No 7,700

Hamada Nc-8 HLNM Private No Paved No 6,

Hateiba Private No Unpaved No 4,100

Houn HLON HUQ Civil No Paved No 5,900

Kufra HLKF AKF Civil No Paved Yes 12,000

Majed Private No Unpaved No 7,200

Marsa al-Brega S-21

HLMB LMQ Private No Paved No 7,200

Messla HLML Private No Paved No 7,200

Misurata MRA Civil Yes Paved Yes 10,300

Nafoora M4 HLNR Private No Paved No 7,200

Oxy 103 A HLZG Private No Paved No 5,600

Ras Lanuf V 40

HLNF Private No Paved No 5,900

In 2006, a $2.5bn upgrade of the state’s busiest airports was announced by the Civil Aviation Authority (CAA) aimed at expanding capacity to about 28 million passengers a year from an estimated 5 mil-lion. Under the plan, Tripoli and Sebha were to be expanded simultaneously, with Benghazi following close behind. Other air-ports earmarked for improvement included Ghat, Ghadames and Tobruk, all of which serve tourism sites.

The civil war in early 2011 brought the local aviation sector to a standstill. This was confirmed on 19 March 2011 when a UN Security Council resolution in 1973 effectively banned all Tripoli-based carriers from flying. Commercial activity recommenced on 2 November 2011, when, following Nato’s announce-ment that it was halting military operations on Libya, Alitalia flew 100 passengers from Rome to Tripoli. The carrier was quickly followed by a host of other airlines including Turkish Airlines and Egyptair, as well as Qatar

“In 2006, a $2.5bn upgrade of Libya’s busiest airports was announced to expand capacity”



Main airports (Continued)

Location ICAO location indicator IATA location indicator Usage Customs Runway IFR runway Length (feet)

Sabah 74 Private No Unpaved No 5,200

Sebha HLLS SEB Civil Yes Paved Yes 11,800

Sahil HLSH Private No Paved No 4,500

Samah Private No Unpaved No 4,200

Sarir C-4 HLSA Private No Paved No 7,200

Sirte HLGD SRX Civil No Paved No 12,000

Tagrift V10 Private No Unpaved No 6,500

Tobruk HLGN TOB Civil Yes Paved No 9,700

Tripoli International

HLLT TIP Civil Yes Paved Yes 11,800

Tripoli Mitiga HLLM MJI Civil Yes Paved Yes 11,076

Ubari QUB Civil No Paved No 8,000

Zuara HLZW WAX Civil No Paved No 5,900

ICAO=International Civil Aviation Organisation; IATA=International Air Transport Association; IFR=Instrument Flight Rules. Source: World Food Programme logistics cluster

Contract awards on Libyan airport expansion programme

Project Package Contractor Value ($m) Date of award Design consultant

Tripoli International airport expansion

New terminals Odebrecht, TAV, CCC 1,400 Q3 2007 ADPI

Air traffic control tower Vinci 76 Q4 2008 ADPI

Benghazi International airport expansion

Air traffic control tower Indra na Q3 2007 ADPI

New terminal SNC Lavalin 542 Q3 2007 ADPI

Sebha New terminal CCC, TAV 300 Q3 2007 ADPI

Air traffic control tower Indra 58 Q3 2007 ADPI

CCC=Consolidated Contractors Company; na=Not available. Source: MEED Insight

Airways, which started flights to Beng-hazi for the first time.

Prior to the civil war, the local aviation sector was preparing for a period of expansion with the International Air Transport Association (IATA) forecasting growth in Libyan passenger air traffic of 6.9 per cent a year between 2010 and 2013. Whether this can be achieved will depend largely on how quickly the recon-struction programme can begin and whether political stability can be restored.



Tripoli airport Existing capacity: 3 million passengers a yearPlanned capacity: 20 million passengers a yearTotal project cost: $2.1bnExpansion of Tripoli’s international airport was identified as a key priority in 2006, when the then prime minister Al-Baghdadi Ali al-Mahmoudi announced a $450m project to build a new terminal and appointed France’s Aeroports de Paris (ADP) as designer, supervisor and project manager. By the time the main construc-tion contract was awarded to a joint ven-ture of Brazil’s Odebrecht, Athens-based Consolidated Contractors International Company (CCC) and Turkey’s TAV in Sep-tember 2007, the scope of works had dou-bled to become a twin terminal project with capacity of 20 million passengers a year. A year later, French construction giant Vinci was awarded in joint venture with Libyan Investment & Development Company (Lidco) a $76m contract to con-struct the air traffic control tower.

The expansion was originally due to be completed by September 2009, but it encountered serious delays. By August 2009, it was already running two years late as a result of changes to the project’s scope and rising costs. The cost-plus con-tract model employed was also a factor: although it minimised contractor risk, it led to intense negotiations over the final

cost. After the negotiations, it was agreed that the interior fit-out package for the west-ern terminal would be removed from the Odebrecht/CCC/TAV venture’s scope. Even so, its contract value was still about $1.4bn.

By the time the civil war broke out, only about 30 per cent of the expansion had been completed. During the conflict, dam-age to the airport and construction site was limited, although all vehicles, equip-ment and materials were looted. Con-struction work is not expected to resume until mid-2012 at the earliest.

Sebha airportPlanned capacity: 3 million passengers a yearTotal project cost: $500mLying 600 kilometres inland from Tripoli, the Sebha airport is undergoing a $500m upgrade, which includes a new terminal building. The project was awarded in two packages in 2007. The first, worth $58m, went to Spain’s Indra for the air traffic control system and communications net-

“During the civil war, damage to the Tripoli airport and construction site was limited”



work. The second, covering the new $300m terminal building, was won by the CCC/TAV venture, with a construction period of 30 months.

As with Tripoli, the Sebha project was suffering extensive delays before the civil war. The main issue was that the CAA decided to change the structure and scope of the project from a build-operate-transfer (BOT) to an engineering, pro-curement and construction (EPC) deal in early 2010.

Benina International airport (Benghazi)Planned capacity: 5 million passengers a yearTotal project cost: $600mLocated 19km east of Benghazi, Benina International is Libya’s second largest airport. Like Tripoli and Sebha, it has been undergoing a major expansion. Designed by ADP, it centres on the con-struction of a new terminal building with capacity of up to 5 million passengers a year. In 2008, Canada’s SNC Lavalin was awarded a $542m contract to build the terminal, while Indra won the air traffic control package.

SNC had been due to complete the project in 2010. However, when fighting broke out in the coastal city in early 2011, the contractor was still pouring concrete for the main structure. Rumours that the air-port’s runway was destroyed in February

2011 proved unfounded. According to the UK’s Capita Symonds, which was work-ing as a project manager on the expan-sion, damage to infrastructure was lim-ited, with looting having been the main issue. As on Tripoli, construction work is not expected to resume until 2012.



With more than 1,770 kilometres of coastline and its strategic location at the boundary between Europe, Africa and the Middle East, Libya should occupy a prominent position in the Mediterranean ports sector. However, a lack of invest-ment, bureaucracy and inefficiencies have combined to make it a peripheral player in the regional shipping industry.

Libya has more than a dozen ports, of which six are commercial, with the remainder serving industrial users, such as Sirte Oil Company at Marsa al-Brega and Libyan Iron & Steel Company (Lisco) at Misurata. By international standards, the commercial ports are relatively small and have drafts of less than 12 metres. The one exception is the state’s main sea-port at Tripoli, which has an offshore berth with depth alongside of 16 metres. The Maritime & Ports Administration, part of the Secretariat for Transport & Communi-

EGYPT

NIGER

TUNISIA

LIBYA

CHAD

SUDAN

Tripoli

Misurata

Sirte

El-Sider

Ras Lanuf Marsa al-Brega

Zueitina

Khoms

Abu KammashZuara

Azzawiya

Benghazi

Derna

Tobruk

Ports

Source: World Food Programme

cations, is in charge of port infrastructure, with work overseen by the Board for the Execution of Transport Projects (BETP). However, in 2010, plans were approved for the formation of a higher ports authority.

Much of Libya’s port infrastructure was built in the 1970s and 1980s by contrac-tors from the former Yugoslavia and is now in urgent need of upgrading, on account of age. Although there has been some investment in recent years, it has focused on refurbishing existing infra-structure. The main exception was a plan to build a new commercial port to the west of Sirte, with a capacity of 8 million tonnes a year (t/y). The US’ Bechtel signed a memorandum of understanding (MoU) to construct the port in 2008, for which the Netherlands’ Royal Haskoning is the design consultant. However, the $1bn contract never came into force.Before the war, Tripoli had drawn up plans to invest $1.3bn in its commercial

Ports



Port projectsTripoli Port breakwater reconstructionGeneva-registered Archirodon Construc-tion (Overseas) won the $222m construc-tion contract to rebuild the Tripoli Port breakwaters in the third quarter of 2007. Placed by the Maritime & Ports Authority, it covered construction of a 4,700-metre rubble mound extended berm in front of the two existing 2,000-metre-long break-waters. The main consultant on the project was Royal Haskoning. The project was about 40 per cent complete at the start of the civil war in early 2011 and it sustained no damage during the conflict.

Benghazi Port phase 2A Turkish joint venture of STFA and EREN was awarded the $104m contract by the Maritime & Ports Authority in August 2007. It called for the construction of 37 new buildings, earthworks, drain-

km²=Square kilometres; t/y=Tonnes a year; na=Not available; m²=Square metres; *16m at offshore berth. Source: World Food Programme, Logistics Assessment, Libya, March 2011

Major ports

Tripoli Misurata Marsa al-Brega Benghazi Derna Tobruk

Area (km²) 3 3 1.15 4.4 na 1

Capacity (t/y) na 6 0.36 4 na 0.6

Quay length (m) 4,029 3,550 1,120 4,490 453 1,702

Max berth draft (m) 12* 11 13 10.53 9 9

Covered storage (m²) 34,546 67,000 1,500 7,500 0 3,600

Open storage (m²) 377,220 600,000 64,500,000 44,500 15,000 15,000

Vessels a year 600 na na na 170 120

ports sector. The programme included the development of Benghazi into a modern container terminal and the expansion of Derna port.

As in the aviation sector, the war halted all port projects and disrupted the local ship-ping sector. Although naval ships became a key target for the Nato bombing campaign, with the ports of Tripoli, Sirte and Khoms affected, the damage to port infrastructure was minimal. The bigger problem was the looting and theft of equipment.

age, electrical works and fencing, and was scheduled to take 33 months. However, it was still to be completed as of early 2011.

Azzawiya harbourPlans to build a new harbour at the Azza-wiya oil refinery, west of Tripoli, have been under consideration for several years. The aim of the estimated $280m project is to replace three offshore single buoy moorings with five sheltered berths to serve liquefied petroleum gas (LPG) tank-ers of up to 5,000 dead weight tonnes (dwt), product tankers of up to 70,000 dwt and crude tankers of up to 150,000 dwt. The Azzawiya Oil Refining Company project was out to tender as the civil war broke out, with three bids having been submit-ted, but not opened. Project sources said in November 2011 that the client was keen to proceed with the scheme and was planning to approach the original bidders.

Sirte East Port developmentConstruction was reportedly under way on the Sirte East commercial harbour by an unidentified contractor in 2010. Royal Haskoning, along with the local Maward Consulting Engineers, was providing technical assistance.



Over the past 40 years, Libya has invested heavily in developing a national road net-work. As of 2010, it had an estimated 83,000 kilometres of road, of which 47,000km was paved. This represented a significant expansion on the 8,800km of paved highway in 1978. Vehicle usage has risen strongly in recent years and reached 1.8 million in 2008, with cars accounting for 76 per cent of the total.

Libya’s most important road is the coastal highway, which stretches along the entire coastline from the Tunisian border in the west to Egypt in the east. On the way, it links the major cities of Tripoli and Benghazi, and passes through Khoms, Misurata and Sirte, before reaching Derna and Tobruk.

The 1,822km highway was built in the 1930s when Libya was under Italian colo-nial rule. The governor general, Italo

LIBYA

ALGERIA

TUNISIA

CHAD

SUDAN

Tripoli

SabrataZuara

Nalout

Zintan GharyanTarhouna

Beni Waled

Ghadames

Sebha

KhomsMisurata

Sirte

Benghazi

Al-BeidaDerna

Marsa al-Brega

AjdabiyaRas Lanuf

Houn

Ben JawadEl-Sider

Tobruk

Azzawiya

EGYPT

NIGER

TUNISIA

LIBYA

CHAD

SUDAN

Tripoli

Road network

Source: www.ezilon.com

Source: World Health Organisation

Vehicles in Libya

TypeNumber (million)

% of total

Cars 1.388 76

Minibuses and vans 0.219 12

Buses 0.091 5

Trucks 0.091 5

Motorbikes and three-wheelers

0.036 2

TOTAL NUMBER 1.826 100

Roads



“Most of Libya’s major road networks have been built by Korean, Turkish and Chinese contractors”

Balbo, was credited with building the road, which opened in 1937. Thirty years later, it was repaved.

Due to its size, Libya has several other major arterial roads. A 787km highway runs from Tripoli down to the southern city of Sebha and on to Ghat, a further 552km. Heading southwest from the capital is the 602km road to Ghadames. In the east, the main southerly highway is the 871km road linking Ajdabiya to Kufra, while the former is also connected to Tobruk via a 410km link. Most of the major road networks have been built by Korean, Turkish and Chinese contractors.

In recent years, Germany’s Strabag has made a strong push into the Libyan roads sector. In 2008, it was awarded, in joint venture with Lidco, the 221km Ajdabiya-Benghazi-Al-Marj section of the coastal highway by the General People’s Commit-tee for Communication & Transport, Roads & Bridges. It followed this up with a 210km road maintenance contract cov-ering the highway between Misurata and Sirte. In 2009, the contractor won a $66m contract to upgrade 22km of the highway serving Tripoli International airport and a year later, it was awarded a $143m con-tract to dualise the Ras Ajdir-Garabouli road in the west.

Given its exposure and substantial order book, Strabag was hit hard by the civil war, writing off €50m ($69m) in losses

and a further €350m ($483m) in forward orders. The company sent a reconnais-sance team into Libya in October 2011 and it reported that machinery had been stolen and camps destroyed. The contrac-tor is planning to send expatriate staff back to Libya, although this is unlikely to take place before 2012 and only once security is guaranteed.

Turkey’s MNG Group, through contractor MAPA Contracting & Trading, was also working on several road contracts. These included the 200km rehabilitation and dualisation of the Al-Marin-Al-Beida-Derna section of the coastal highway in the east. The $150m contract started in late 2006 and was set to run into late 2011. Another 103km dualisation contract for the section between Sabrata and Ras Ajdir was also under way. MAPA declined to comment in October 2011 on the status of its projects, but one of its subcontractors confirmed that work had stopped and there were no immediate plans to return.Prior to the civil war, the largest upcom-

Selected major road projects

Route Length (km) Cost ($m) Status Scope

Ras Ajdir to Imsaad 1,700 3,000 Design New road

Ras Ajdir to Garabouli 200 146 Awarded to Strabag Upgrade

Al-Beida to Derna 200 150 Awarded to MAPA Rehabilitation

Sabrata to Ras Ajdir 103 80 Awarded to MAPA Rehabilitation

km=Kilometres. Source: MEED Projects



“In the longer term, contractors expect more road dualisation contracts to be awarded”

ing road project was the planned 1,700km Ras Ajdir to Imsaad highway, which was part of the friendship treaty signed between Muammar Gaddafi and Italian Prime Minister Silvio Berlusconi in 2008. The treaty called for Rome to invest $5bn in Libyan projects over the next 20 years as part of a compensation package for the Italian colonial period.

An Italian consultant was understood to be carrying out preliminary design work for the estimated $3bn highway and a number of Italian contractors had expressed interest in building it in 2010.

These included two major consortiums of:• Bonatti, Ghella, Grandi Lavori Fincosit, Toto Costruzioni Generali, Astaldi• Impregilo, CMC di Revenna

One other major new road was also under discussion. The 787km link between Tripoli and Sebha formed part of the UN Economic Committee for the Africa Trans-Highway 3 project, a planned 10,800km road running from Tripoli in the north to Cape Town in the south. Despite being backed by the UN, African Development Bank and the African Union, Tripoli had been reluctant to complete a second sec-

tion of the highway, running southwards into Chad, for fear of causing instability.

Dualisation of Libya’s main highways was a key focus for Tripoli prior to the out-break of the civil war. However, post war repairs of potholes and bomb damage will be a greater priority going forward, espe-cially on routes such as the Benghazi-Sirte highway. Such projects are likely to be carried out by local contractors. In the longer term, however, contractors expect more road dualisation and maintenance contracts to be awarded.



Although Libya does not have any rail infrastructure in operation, it had a narrow gauge network serving Tripoli and Beng-hazi. Built by the Italians in the first half of the 20th century, the 950-millimetre gauge lines connected the cities with outlying areas. Tripoli had three lines, one of which headed west 100km to Zuara and a second east to Tajoura. The third and final line ran 100km south from the capital to Gharyan.

Benghazi had two lines, both stretching inland in a V shape from the city. One was 110km long and went to Al-Marj, while the other linked Suluk, a distance of 56km. During the second world war, a further 350km line was completed in 1942 as part of the allied defence of North Africa. However, this was closed in 1946.

By the mid-1960s, the last section of the narrow gauge network was also shut, but following the Gaddafi coup in 1969, Tripoli began planning a major rail pro-

University

Airport

“A”-Central

Janzur

A-02 A-01 A-1 A-2 A-3 A-4 A-5 A-6 A-7

C-1 C-2

C-3

C-4

C-5

C-6

C-7 C-8 C-9 C-10 C-11

C-12

C-14

C-15

C-16

C-17

C-18

C-19 C-20

A-8 A-9 A-10 A-11 A-13 A-14

B-9

B-8

B-7

B-6

B-5

B-4

B-3

B-2

B-1

B-10

B-24bB-24c

B-25 B-26

B-12

B-11

B-13

B-14

B-16

B-17

B-18

B-19

B-20

B-21

B-22

B-23

B-24a

A-15 A-16 A-17

A-18

B-04B-03B-02B-01

A-19 A-20 A-21

A-12

TajouraRailway Terminal

Planned Tripoli metro

Source: Uvaterv Engineering Consultants

Rail



“Most of the metro network was to be subsurface, with only 19 kilometres of line above ground”

Most of the network was planned to be subsurface, with only 19km of line and eight stations above ground. The client for the revised study scheme was the Rail-roads Project Execution & Management Board, which was given responsibility by the General People’s Committee in May 2006.

Although Uvaterv completed its revised study in 2009, the project has not pro-gressed since. Internal competition among ministries and committees was blamed for the lack of progress. As of early 2011, the Railway Executive Board, in charge of the national rail system, and the Railroads Project Execution & Management Board operated independently and competed for funding with each other and different organisations within the General Secretar-iat for Transport & Communications. Nev-ertheless, the rationale for going ahead with the project remains strong, given the need to connect the Tripoli University project and the Tripoli airport expansion to the city centre.

Metro line characteristics

Line Deep (km) Subsurface (km) Surface (km) Elevated

A, green 14.56 15.04 0.0 0.0

B, red 19.15 13.72 14.53 4.88

C, blue 20.95 1.38 0.0 0.0

Metro station locations

Stations Deep (km) Subsurface (km) Surface (km) Elevated

A, green 11 11 0.0 0.0

B, red 17 6 3 5

C, blue 17 2 0.0 0.0

Metro technical aspects

Operational length 104.21km

Stations 72

Traffic system Automatic train control

Electronic system Scada

Power supply 750V DC using third rail with 3x400/230V AD for auxiliary consumer supply

Telecoms CCTV, exchange phone system, dispatcher phone system, radio phone system, emergency call system, passenger text info service

Signalling system Electronic in cooperation with train control system (ATO/ATP) system

km=Kilometres. Source: Uvaterv Engineering Consultants

km=Kilometres. Source: Uvaterv Engineering Consultants

km=Kilometres; ATO=Automatic train operation; ATP=Automatic train protection. Source: Uvaterv Engineering Consultants

gramme. Taking in a national rail network and a metro for the capital, it took until 2008 for the first major construction con-tracts to be awarded.

Tripoli MetroPlans for a light rail system linking the capital to the airport were first unveiled in the 1980s, when Hungary’s Uvaterv Engineering Consultants completed the first study on the Tripoli metro. This was followed up in 2007 by the same firm being commissioned to produce a revised study.

The revised study proposed three metro lines; A (green line), B (red line) and C (blue line) with a total length of 104km and served by 72 stations. The longest of the three was the 52km red line, which would link Tripoli airport to the city before running eastwards to the univer-sity and on to Tajoura. The second was the 30km green line running directly across the city from Janzur to the east and the third blue line would run 22km from the western coast, then take a southern run forming a U shape, before emerging on the eastern side of the city.



National rail networkUvaterv also carried out studies in the 1980s on a national railway. Unlike the Tripoli metro however, several major packages were under execution by Chi-nese and Russian contractors prior to the civil war. But the outbreak of hostili-ties brought construction activity to a halt and led to the death of Said Moham-med Rashid, the chairman of the Railway Executive Board. Rashid was credited for the significant progress made in the rail sector since 2008.

The first contract on the 2,000km coastal line was awarded to China Railway Construction Corporation (CRCC) in February 2008. It covered a 352km sec-tion between Khoms, Misurata and Sirte and included the construction of 26 sta-tions, 55 bridges and 370 footbridges. Estimated to be worth $1.85bn, it was originally scheduled for completion by 2013.

LIBYA

NIGER

ALGERIA

TUNISIA

CHAD

SUDAN

TripoliSabrata

Zuara

Nalout

ZintanGharyan

Tarhouna

Beni Walid

Ghadames

Sebha

KhomsMisurata

Sirte

Benghazi

Al-BeidaDerna

Marsa al-Brega

Ajdabiya

Ras Lanuf

Houn

Ben JawadEl-Sider

Tobruk

Azzawiya

Planned rail networks

Designed

Not designed

Design currently being updated


Rail projects

Line Value ($m) Scope Status Client

Coastal high speed line

6,500 2,000km coastal line from Ras Ajdir in the west to the Egyptian

border

Contracts awarded in 2008/09 to CRCC and Russian Railways

Railway Executive Board

Minerals railway 800 800km inland railway from Wadi Shati to

Misurata

Contract awarded in 2008 to CRCC

Railway Executive Board

Tripoli metro, red line

500 52km of track, plus stations

Preliminary design complete, project on hold

Railroads Project Execution & Management Board

km=Kilometres; CRCC=China Railway Construction Corporation. Sources: MEED Projects, MEED Insight

CRCC won a further two packages on the coastal railway. In August 2008, it was contracted to extend the line from Khoms to Tripoli, also by 2013. Six months later, it picked up the 172km section between Tripoli and Ras Ajdir on the border with Tunisia.

The Chinese contractor was working on one other rail project in the local market, the $824m minerals railway project. Involving the construction of a 800km line between Wadi Shati near

“The first contract on Libya’s coastal line was originally set to be completed by 2013”



Sebha and Misurata, the contract also covered five train depots, 40 bridges and 940 footbridges.

CRCC has not been the only beneficiary of the Libyan rail expansion boom. In April 2008, Russian Railways was awarded a $3.1bn contract to build the 550km sec-tion of the coastal railway linking Sirte to Benghazi, which will have about 30 sta-tions. Construction began in December 2008 and was scheduled for completion at the end of 2012.

Major subcontracts were placed by both Russian Railways and CRCC, with the main beneficiaries being Italy’s Ansaldo and Selex Communications for signalling and communications work and German-based Vossloh Cogifer for fasteners and switches. To support the rail programme, a welding plant, with capacity for 500km of track a year, was built by Russia’s Psko-velectrosvar in June 2010.

Some 800km of the coastal line has still to be awarded, with the focus on eastern Libya and the link between Benghazi and Imsaad on the Egyptian border. The Imsaad to Tobruk section was in the design stage in early 2011, while the $2bn Benghazi to Tobruk link, covering a dis-tance of about 450km, was under study by Germany’s Dorsche Gruppe.

The outbreak of hostilities in early 2011 led to the suspension of the entire rail pro-

gramme, with employees from both the Russian and Chinese contractors having to be evacuated. Despite the end of the civil war being officially declared in October 2011, it is likely to be some time before construction resumes. As of November 2011, calls to both the Railway Executive Board and the Railroads Project Execution & Management Board went unanswered, suggesting that restaffing and the resump-tion of operations had still to take place.

Major contract awards by Railway Executive Board

Line Length (km) Value ($m) Contractor

Khoms-Sirte 352 1,850 CRCC

Sirte-Benghazi 550 3,100 Russian Railways

Khoms-Tripoli 120* na CRCC

Ras Ajdir-Tripoli 172 805 CRCC

Wadi Shati-Misurata 800 824 CRCC

km=Kilometres; CRCC=China Railway Construction Corporation; *=Estimate; na=Not available. Sources: MEED Projects, MEED Insight


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Documents

FINAL Libya Report