Total reaches rail deal paving way for Donges refinery investment

PARIS (Reuters) - French oil major Total said it had reached an agreement with the French government and local authorities for the construction of a new rail line that will bypass its Donges refinery, paving the way for new investments at the plant.

The railway currently cuts right through the refinery on the Atlantic coast, preventing it from being modernised.

Total had said an agreement on the rail line was a condition of its decision to invest 400 million euros ($434.6 million) to upgrade the plant and expand its gasoline production capacity.

The French government, local authorities and Total will each pay a third of the full cost of the by-pass project, estimated at 150 million euros, the oil company said in a statement.

Total expects the new line to be completed in 2021.

(Reporting by Michel Rose; Editing by James Regan)