Iraq inks $6.5 billion refinery deal

Iraq's oil ministry has signed an agreement with the Refinery of Karbala Corporation Ltd, which will build a refinery in central Iraq's Karbala region that could potentially cost $6.5 billion (Dh24 billion) when completed in four years. The refinery will have a capacity of 200,000 barrels per day (bpd) of crude oil and will produce octane gasoline both regular and premium as well as diesel fuel for the domestic market, a statement said. Italian engineering firm Saipem will take care of the processing and technical aspects of the project. "Karbala Refinery will be located 100km south of Baghdad on a six-square-kilometre plot of land, and will be the most advanced state-of-the-art refinery with almost [a] full conversion rate and with an estimated cost of $6.5 billion," Dean Michael, chief executive officer of Karbala Refinery Corporation, said. The project is part of Iraq's plans to build four new refineries to add around 750,000 bpd of refining capacity at an estimated cost of more than $20 billion. The other three new refining facilities in the national refinery expansion plan will be located in Nassiriya, Maysan and Kirkuk. Iraq is also upgrading its existing 140,000 bpd Basra refinery. "Such a refinery is due to become the most technically advanced refinery in Iraq with the use of the latest available technologies that will ensure almost full conversion of crude to final products in line with new Iraqi laws [as regards] refining and the environment," a statement said. According to the Organisation of Petroleum Exporting Countries (Opec), Iraq produces about 453,000 bpd of refined products and uses 589,000 bpd. Kate Dourian, editor of Platts Middle East, said, "Iraq has been planning to build a refinery in Karbala since the 1980s. The project is part of the government's plans to raise its refining capacity by 750,000 bpd, up from the existing 660,000 bpd. As Iraqi economy picks up... the country will need new refining capacity to meet the growing demand and it comes right in time." From / Gulf News