Dubai-based TransAsia Gas International said it is in talks to develop an oil refinery in each of Pakistan and Sri Lanka at a cost of $1.4 billion.

TransAsia is also leading a group of companies to upgrade a refinery in Libya -- holder of Africa's largest oil reserves -- at a cost of $2 billion, for which it is planning to borrow, chief executive officer Zahid Muzzafar told Reuters on Tuesday.

"The group's strategy is to look at the most attractive markets where people are not present," Muzzafar said by telephone from the Libyan capital, Tripoli.

TransAsia is among a wave of private or part-private Gulf companies such as Abu Dhabi National Energy Co (Taqa) and Dana Gas that are expanding outside the Gulf, where state-owned oil and gas producers dominate.

In less than 15 months Taqa has agreed on acquisitions worth more than $10 billion ranging from India to Canada. Abu Dhabi-listed Dana Gas is developing natural gas reserves in Egypt and gas infrastructure in the Kurdish region of Iraq.

Talks with the governments of Pakistan and Sri Lanka focus on developing a 100,000 barrel-per-day refinery in each of the two countries, Muzzafar said. Each unit will cost at least $700 million, he said.

In Pakistan, where it has licences to build two 130 megawatt power plants, TransAsia is in "advanced" talks to relocate a refinery to Port Qasim, 35 kilometres east of Karachi. It will take units from old refineries and use them to build new plants, which should help cut costs and construction time, Muzzafar said.

It has also secured land in Sri Lanka to relocate a refinery to Hambantota in the south of the island, Muzzafar said. In Libya, the company is working with Dubai-based Star Petro Energy to upgrade the 220,000 barrel-per-day Ras Lanuf export refinery, after agreement on Monday with Libyan National Oil Corp.

"We are very upbeat about Libya," said Muzzafar. "The current products do not meet the standards, but we want to be able to generate better returns on the products."    

The five-year upgrade contract aims to raise product standards at the refinery to boost exports to Europe. The plant produces naphtha, kerosene, and light and heavy gas oil, as well as ethylene and polyethylene, according to its Web site. TransAsia expects to select an international bank in the next few days to advise on financing, Muzzafar said.

"There will be project finance, but we are open to anything, including Islamic finance," he said, declining to be more specific. - Reuters