Israel Negotiates with U.S. Investors on Haifa Oil Refineries

Negotiations are under way-with American investors for financing of modernization of the oil refineries at Haifa, it was indicated here today by Ministry of Finance circles. The refineries were built in 1938 by the British Petroleum Company. The facilities became Israeli property after they were purchased last February, by the Government and a private firm.

At the same time it was learned today that Israel will soon become an exporter of refined petroleum products again, for the first time since the Arabs closed down the Iraq-Haifa pipeline, 11 years ago, during Israel’s War of Independence. It was revealed that under a new contract, an unidentified country will market 400, 000 tons of gasoline and other petroleum products annually. The “gas” and other products are processed in the Haifa refineries.

Finance Ministry sources said that, when the contract becomes effective, the Haifa refineries will be able to operate at 50 percent capacity, instead of the present one-third capacity. The present capacity is enough to provide Israel’s needs of 1, 500, 000 tons a year. Ultimately, the Haifa refineries are to be brought up to full capacity of 4, 000, 000 tons a year. The exports will go, under the new contract, to several European countries.

It was also disclosed today that work is ahead of schedule on conversion of the Eilat-Haifa pipeline into a 16-inch line. Parts of that line now includes tubes of only eight-inch bore.

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