Iraq has signed a preliminary agreement for Egyptian company Al Qalaa to build a 150,000-barrels-a-day refinery near the northern city of Mosul , as part of a drive to boost fuel supplies, Iraq 's deputy oil minister said Tuesday.

According to the agreement, the Egyptian company is given three years to carry out feasibility studies and designs for the refinery before deciding whether to go ahead with construction, Ahmed al-Shammaa said in a statement emailed to Dow Jones Newswires.

Shammaa didn't disclose value of the refinery.

Crude oil for the refinery would be produced from two nearby fields, Najmah and Qaiyarah, which are being developed by the Angolan state-owned oil company Sonangol.

According to an Iraqi investment law, the Egyptian firm can also operate fuel stations in Iraq using products that would be produced from the new refinery, Shammaa said.

Last month, the Iraqi Oil Ministry signed a preliminary agreement with an Italian consortium to build and operate a 200,000-barrels-a-day refinery in Kerbala, central Iraq . The joint venture includes Italy 's Saipem SpA (SPM.MI), a large financial institution, and ex-Eni SpA (E) executives.

Iraq plans to build three more refineries--one in Missan province with a processing capacity of 150,000 barrels a day; another in Kirkuk with a capacity of 140,000 barrels a day and a third in Nassiryah with a capacity of 300,000 barrels a day.

Iraq has three aging refineries in Baghdad , Basra and Baiji, as well as a scattering of smaller refineries throughout the country, with designed capacities of 750,000 barrels a day. Outstanding repairs, crude transport bottlenecks, acts of sabotage and a lack of crude storage capacity cut their operational capacity to around 550,000 barrels a day.

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