Dubai has signed a major agreement to set up a crude oil refinery project to address its growing energy needs.

Sheikh Ahmed bin Saeed Al-Maktoum, chairman of the Dubai Supreme Council of Energy and president, Dubai Civil Aviation Authority, signed a memorandum of understanding with Sam Pai, chairman, China Sonangol Group.

The deal mandates China Sonangol International Pte Ltd. to set up a crude oil refinery in Dubai.

The state-of-the-art refinery will process end products for domestic use as well as targeted international markets.

For this purpose, a project consortium will be created to oversee the front-end engineering design, green-field project financing and process flow management.

With upstream and downstream oil and gas operations in Asia and Africa, China Sonangol will bring its expertise and resources in mobilizing the project consortium.

Dubai-based Noor Investment Group will act as the financial adviser to Dubai Supreme Council of Energy. The initiative marks yet another step by the Dubai Government to address the increasing energy requirements of a rapidly growing economy.

The set-up of the refinery comes at a time when the country’s non-oil economy is forecast to expand 4.5 percent in 2013, the fastest pace since 2008 according to data compiled by Bloomberg and International Monetary Fund estimates.

Fitted out with advanced technology, the refinery will seek to ensure the sustained supply of refined end products for the emirate’s future energy consumption while further augmenting Dubai’s export portfolio.