Page 4 - DMEA Week 27 2021

DMEA COMMENTARY DMEA

Iraq nears award

for Dhi Qar refinery

Iraq this week said it would soon sign a contract for the construction of a refinery in the

southern Dhi Qar Governorate as the downstream continues to get the attention it requires.

MIDDLE EAST IRAQ this week said it would soon award a China Nuclear Engineering & Construction
contract to a Chinese-led consortium to build (CNEC) and an unnamed Emirati company, to
a 100,000 barrel per day (bpd) refinery in the carry out the project.
WHAT: south of the country. Abdul Jabbar said that the deal would be
A Chinese-led consortium The news follows the recent announcement finalised this month, noting that the refinery
has been chosen to of belated progress in the downstream sector, would play an important role in Baghdad’s sus-
develop the 100,000 bpd with Baghdad intent on upgrading existing facil- tainable development plans while providing job
facility. ities and expanding capacity. opportunities in Dhi Qar.
The latest announcement centres on the This will be the second refinery for which
WHY: southern Dhi Qar Governorate, north-west Norinco and PowerChina have been contracted
Two of the signatories of Basra, and marks progress on a preliminary following the signing of a deal in January 2018
were involved in a 2018 agreement that was put in place at the start of for the construction of a 300,000 bpd refinery on
contract for a 300,000 the year. the al-Fao Peninsula to the south-east of Basra,
bpd facility at Fao which with the earlier project having failed to progress.
is yet to materialise. Dhi Qar Downstream Middle East and Africa (DMEA)
Speaking to local media networks, the country’s understands that that the local Amira Group was
WHAT NEXT: Oil Minister Ihsan Abdul Jabbar said: “The refin- among several companies to have expressed an
Progress has been made ery has a production capacity of 100,000 bpd and interest in working on the Fao facility, but fol-
on projects elsewhere, is intended to meet the country’s growing needs lowing several failed initiatives with small and
showing that Baghdad is of refined products.” relatively unknown players, Baghdad is keen to
finally making the strides He added that the unit would include units attract household names.
its downstream sector for hydrogenation, benzene improvement, isom- Meanwhile, Norinco is the parent of Zhen-
requires. erisation, fluid catalytic cracking (FCC), contin- hua Oil Co. with which Iraq’s state oil marketer
uous catalytic reforming (CCR) and an asphalt SOMO recently cancelled a $4bn prepayment
production, as well as an electric power produc- crude oil term supply contract after oil prices
tion unit. It will be configured to produce Euro 5 rebounded, tilting the contract out of Baghdad’s
specification fuels. favour.
The Ministry of Oil (MoO) has chosen The Chinese firm already has a profit-shar-
al-Awsat Energy Co., a consortium consisting ing deal with SOMO that provides the Iraqi firm
of state-owned firms China North Industries with a cut of earnings from Zhenhua’s onward
Group Corporation Ltd (Norinco), Power Con- sale of its crude, around 18mn barrels per year
struction Corporation of China (PowerChina), of which goes to the Huajin Chemical refinery.

P4 www. NEWSBASE .com Week 27 08•July•2021