Page 12 - MEOG Week 34 2022

MEOG PROJECTS & COMPANIES MEOG

Karbala plant to help Iraq

slash fuel imports in 2023

YEMEN IRAQ’S Oil Minister Ihsan Abdul Jabar has 2014, he explained to MEES.
said he expects the Karbala refinery to cut the More recently, however, Iraqi authorities
country’s fuel imports by more than half when it have been seeking push the project forward. On
becomes fully operational next year. August 18, the Ministry of Oil published a video
The $6bn plant, which has been under con- update claiming that the plant had reached the
struction since 2014, is due to begin test runs in milestone of 95.5% complete as of the end of July.
October of this year and will then reach its full Abdul Jabar told MEES that Baghdad was
operating capacity of 140,000 barrels per day working harder because it now saw the refinery
(bpd) around the end of the first half of 2023, as a “commercially more viable” proposition in
Abdul Jabar noted. By that time, the refinery will light of the upsurge in world crude oil prices ear-
be in a position to “reduce [Iraq’s fuel] import lier this year. He also reported that the Karbala
needs by 60%,” MEES quoted him as saying. plant was due to receive its first shipment of feed-
Midlands Oil Refining Co. (MORC), the stock in mid-October.
Iraqi Oil Ministry subsidiary that is slated even- Hamid Younes, Iraq’s Deputy Minister of
tually to own the plant, appears to concur with Oil for Downstream Affairs, concurred, telling
the minister’s estimation of the timeline. It has MEES that the refinery’s first phase was on track
said it expects the refinery to reach full operating to begin operating in the month of November.
capacity in the first or second quarter of 2023. The plant is then likely to reach its full operating
Iraq’s government awarded a contract for capacity of 140,000 bpd in September 2023, he
the building of the Karbala refinery to a South said. He did not explain why his timeline differed
Korean consortium led by Hyundai Engineering from that cited by MORC and the oil minister.
in 2014. Since then, however, work on the project When finished, the Karbala refinery will turn
has fallen far behind schedule. out 9mn litres (or 56,600 bpd) per day of Euro-5
In 2019, Iraq’s then-Oil Minister Thamir standard regular and premium gasoline, along
al-Ghadhban attributed the delays to the gov- with 3mn litres per day (18,900 bpd) of kerosene
ernment’s failure to uphold all of its financial and 2.2mn litres per day (13,800 bpd) of diesel
obligations. Baghdad found itself unable to pay fuel. Residual fuel oil will make up only 18% of
its contractors and suppliers on time as a result of the new plant’s output, far below the average fig-
the crash in crude oil prices and the armed con- ure of 47% that prevails among Iraq’s other exist-
flict with Islamic State (Daesh) that occurred in ing refineries.™

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