Page 13 - MEOG Week 47

MEOG TENDERS MEOG

Baghdad open to bids to build Fao refinery

IRAQ IRAQI Oil Minister Ihsan Abdul Jabbar said last costing, and the lack of consistency which has
week that Baghdad would soon kick off bidding long plagued Iraq’s downstream.
for work to build a new 300,000 barrel per day In August this year, though, Japan’s JGC was
(bpd) refinery on the al-Fao Peninsula in the awarded a $3.75bn contract to build new refining
south of the country. facilities on land adjacent to the existing 210,000
In a statement Jabbar said that the facility bpd Shuaiba refinery outside Basra.
was to be built on either a build operate transfer In a press release, JGC said that it had received
(BOT) or build own operate transfer (BOOT) a lump sum engineering, procurement, con-
investment contract model, noting that a petro- struction and commissioning (EPCC) contract
chemical unit could be integrated later. covering a 34,500 bpd fluid catalytic cracking
In September, Jabbar’s deputy, Hamid al-Zo- (FCC) unit, a 55,000 bpd vacuum distillation
bai, told S&P Global Platts that Baghdad aimed to unit and a 40,000 bpd diesel desulphurisation
achieve throughput of 910,000 bpd by Q1 2022, unit. The deal signed with South Refineries
with the minister noting that talks were ongoing Co. (SRC) is part of the MoO’s Basra Refinery
with Italy’s Eni for the creation of a 300,000 bpd Upgrading Project and is due for completion
refinery adjacent to its Zubair oilfield. in 2025, increasing production of gasoline and
Work to rehabilitate and expand existing diesel to 19,000 bpd and 36,000 bpd respectively.
downstream plants has also achieved some Given that JGC’s funding will be provided
recent milestones – notably the restart in Sep- by the Japan International Cooperation Agency
tember that year of the first 70,000 bpd unit at (JICA) and follows a mid-2019 agreement with
the Baiji refinery on the Baghdad-Mosul road, Iraq’s Ministry of Finance for a $1bn loan to
once the country’s largest at 310,000 bpd but upgrade the refinery, this project appears to be
severely damaged during the Daesh invasion the most promising yet.
and occupation. Meanwhile, the Fao announcement follows a
In early 2019, the Ministry of Oil (MoO) January 2018 deal between the MoO and Chi-
announced that capacity at the Basra refinery nese state-owned heavyweights China North
had been expanded by 70,000 bpd to 210,000 Industries Group (Norinco) and PowerChina for
bpd, adding that work was underway to increase the Fao refinery, but little has been heard since.
potential throughput to 300,000 bpd. Middle East Oil & Gas (MEOG) understands
Adding to this confusion was a government that the local Amira Group is among several
statement saying that the total construction cost companies to have expressed an interest in the
for the refineries was $3bn, then noting that the Fao job, but following several failed initiatives
cost of rehabilitation would be much lower. with small and relatively unknown players,
Clearly this was not consistent with industry Baghdad is keen to attract a household name.™

Week 47 25•November•2020 www. NEWSBASE .com P13