Galp approves 998 mln euro refineries investment

LISBON Jan 24 (Reuters) - Portuguese oil company Galp (GALP.LS) said on Wednesday it approved a 998 million euro ($1.30 billion) investment plan for its Sines and Oporto refineries to boost refining margins and increase production.

The investment will enable its refineries to process heavier and cheaper crude oil, raise its refining margin by $3 per barrel and boost the amount of crude processed at both units by 12 percent to 15 million tonnes per year.

"The investment plan approved includes both Sines and Oporto refineries and maintains the existent installed refining capacity of 15.2 million tons per year," Galp said in a statement.

Galp added it also plans to increase diesel production by 2.5 million tonnes and decrease fuel oil production in 2011 "to allow for a better response to consumption trends in the Iberian market."

Portugal's biggest oil company also approved the construction of a cogeneration plant at the Oporto refinery -- similar to the one being built at Sines -- to supply steam and electricity to each refinery.

"The investment in the two cogeneration plants, of 82 megawatts each, will amount to 147 million euros," it said, adding that these and other energy saving investments will help boost Galp's refining margin by $0.5 per barrel in 2010.

Between 2007 and 2010 Galp said it will invest 1.42 billion euros to further integrate its Sines and Oporto refineries, enhance flexibility of the refining system and increase energy efficiency.

Galp's 213,000 barrels per day (bpd) Sines refinery is about 160 km south of the capital Lisbon while its 91,000 bpd Matosinhos refinery is close to Portugal's northern city of Oporto.

Galp is also licensing an 800 megawatt combined cycle power generation plant in Sines with an expected investment of around 410 million euros, it said.