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* Turkish PM visits Libya with 150 Turkish business leaders
* The two nations to set up agric bank with $1 bln capital
(Adds detail on agriculture bank, transport links)
By Ali Shuaib
TRIPOLI, Nov 24 (Reuters) - Turkey wants to source more of its oil directly from Libya as the two Mediterranean countries deepen cooperation on energy, food and investment, government officials said on Tuesday.
Turkish Prime Minister Tayyip Erdogan, visiting Tripoli with a delegation of 150 Turkish business leaders, said the two countries would establish a jointly-owned agricultural bank with capital of $1 billion.
The bank would bolster Libyan investments in Turkish farming as the north African desert country seeks to secure food supplies for a growing population.
Addressing an economic forum, Erdogan said he hoped yearly bilateral trade with Libya would grow to $10 billion within five years from an estimated $9.8 billion this year and $9.2 billion in 2008.
Turkey was also looking for more direct shipments of Libyan oil, Maatoug Mohammed Maatoog, a Libyan government minister who is head of a Libyan-Turkish friendship committee, told Reuters.
"In the meeting the Turkish delegation told (top Libyan energy official Shokri) Ghanem that they need to buy as much Libyan oil as possible directly," Maatoug said.
Tripoli has hosted a string of foreign leaders since Libya renounced banned weapons programmes and agreed to settle compensation claims for bombings and attacks for which it was blamed by the West.
Growing oil income has given it the resources to rebuild roads, railways, ports, industrial areas, schools and hospitals that fell into disrepair during its long isolation.
Turkish firms will be vying with European and other companies for many of the lucrative reconstruction deals.
Tripoli and Ankara will sign agreements on Wednesday for investment and cooperation on agriculture and technology, Maatoug said.
Turkish and Libyan officials announced on Tuesday they had scrapped visa requirements for travel between the two countries.
Air flights between Libya and Turkey would be increased and a ferry route from Izmir in Turkey to Tripoli that was cancelled during the sanctions would reopen, said Erdogan. (Writing by Tom Pfeiffer; editing by James Jukwey) ((maghreb.newsroom@thomsonreuters.com; tel: +212 5 3772 6518; fax: +212 5 3772 2499))