Galp Energia SGPS' board approved several upgrades to its refining system to increase diesel production and decrease fuel oil production by 2011, which will cost 274 mln eur.

The investment plans also includes total investments of around 998 mln eur in Sines and Porto to maintain existing installed refining capacity of 15.2 mln tons a year.

The spending is projected to have a 3 usd per barrel positive impact on refining margins and a positive impact on EBITDA of about 200 mln eur, the company said.

Galp's capital expenditure program for its refining system in 2007-2010 will be about 1.420 bln eur.

Additionally, the oil and gas group will build a cogeneration plant at the Porto refinery, similar to one now being built at Sines refinery, to supply steam and electricity to its existing refineries. The two plants will cost 147 mln eur.

In a filing with stock market regulator CMVM, Galp said that "the increase in diesel production will allow a better response to consumption trends in the Iberian market, in which there is a clear growing demand for diesel and also take advantage of price differential between diesel and fuel in international markets."

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Related Project
Sines Refinery
Facility Type: Refinery Owner: Galp Energia SGPS, SA
Scope: Expansion Location: Sines Portugal