BAGHDAD, Iraq (AP):

Iraq plans to build several new oil refineries and upgrade existing ones to start exporting gasolene and other by-products by 2010, the oil minister said Monday, but acknowledged that insurgent attacks on pipelines remain a serious problem.

Oil Minister Hussain al-Shahristani also said Iraq planned to increase the production of crude oil from about two million barrels per day to the pre-war level of three million barrels per day by the end of the year. He did not elaborate.

The largest of the new refineries - to be located in central Iraq - will be completed by 2009 or 2010, al-Shahristani said during a meeting with members of the parliament's economic committee.

Severe shortage

Although Iraq is believed to hold the third largest crude oil reserves, it is facing a severe shortage of fuel including gasoline, diesel and cooking gas because of the dilapidated state of its refineries.

The shortage of fuel has sent the black market price of gasolene soaring to as much as US$4 a US gallon (euro1 per litre).

The official price is US$1 a gallon.

Also, the pipelines supplying crude to the refineries are often attacked by insurgents who have been fighting U.S. forces and the new Iraqi Government since the fall of Saddam Hussein.

"These pipelines should be protected from north of Baghdad till south of Samarra. This pipelines should be protected to solve the crisis," al-Shahristani said.

He did not give the exact location of the refinery, but said it will have a capacity to produce 140,000 barrels of by-products such as gasoline, diesel and kerosene every day.

Besides, another refinery will be built in Koya near Kwysengeq in northern Iraq with a production capacity of 70,000 barrels per day.

Half capacity

In addition, new units, each with a capacity of producing 70,000 barrels per day, will be added to the existing three refineries in Beiji, Dora and Basra. Beiji is currently operating at half is capacity. With these steps, "we will meet the local need of the oil by-products in 2009," he said. "Iraq will start exporting oil by-products instead of importing them in 2010-2011," he added.

He did not elaborate, and reporters who were allowed to sit in at the meeting were not allowed to ask questions.

Iraq also plans to move into a second phase of development after 2010 when refineries "considered very large by international standards" will be set up in Nasiriyah to produce 300,000 barrels per day, he said.