A group including Egyptian, Saudi Arabian and Kuwaiti investors plans to build a refinery in Egypt worth more than $1 billion and with capacity to process 130,000 barrels per day of oil, an executive involved in the project said yseterday.

The new refinery would be built in Al Ain Al Sokhna east of Cairo on the Red Sea coast, the executive, who asked not to be named, said.

Investment and Securities Group (ISG), a Cairo-based private investment banking company was the main developer and would take a small stake, the executive said.

But he said the main shareholders would be state-owned Egyptian General Petroleum Corporation (EGPC), with roughly 16 per cent, and investors from Kuwait and Saudi Arabia who he declined to name.

An EGPC official confirmed EGPC's 16 per cent stake in the refinery project but gave no further details. "It is a greenfield refinery, a brand new refinery. It is mainly targeting exports," the executive said. "The budget will be $1 billion plus. We are still working on that."

The refinery, which is expected to start up by summer 2009, would process 130,000 bpd of mainly local Egyptian heavy crude with some imports, and would produce fuel to meet Euro 5 European Union regulations on car emissions, the executive said. He said a contract to take the output had been agreed upon with Royal Dutch Shell Plc. Shell in Cairo had no immediate comment.

The project will be financed by roughly 30 per cent equity and 70 per cent debt. France's BNP Paribas and Egypt's Commercial International Bank were acting as financial advisers and would underwrite some debt, he said.

The executive said the firm carrying out the project was expected to be formed in November, with a construction tender to be announced early in 2006.