Page 11 - DMEA Week 04 2020

DMEA REFINING DMEA
Iraq to use Chinese fund to build Kurdish refinery
IRAQ
China and Iraq have agreed to set up a $10bn fund.
IRAQ wants to tap a joint fund with China to finance construction of an oil refinery in its northern autonomous Kurdistan region, a par- liament member said on January 28.
The government also plans to use the fund to build a connecting oil pipeline, along with schools, hospitals and a railway linking the city of Zakho in Kurdistan with the southern port of Basra, Ahmed Al-Saffar, a member of the Iraqi parliament’s finance commission, was quoted as saying by local news agency Aliqtisad.
Al-Saffar did not disclose further details of the refining project. In early 2018, however, Iraq signed a deal with Kurdish authorities on devel- oping a 70,000 barrel per day (bpd) refinery near the northern city of Kirkuk. A company based in the Kurdistan region, Ranya International, was selected as a construction contractor. It was later suggested by Iraq’s oil ministry that the plant would be more than twice this size, capable of processing 150,000 bpd of oil.
The Iraqi government has agreed to co-op- erate with Kurdish authorities on developing a refinery, and ensure both sides benefit from the project, in order to preserve relations with the region and quell calls for its independence.
The projects listed by Al-Saffar would be financed with the help of a $10bn joint oil-for-re- construction fund, which Iraq and China agreed
to set up in December. Iraqi officials said at the time that China would provide the bulk of the funds while Iraq would supply the country with 100,000 bpd of oil.
The fund’s purpose is to rebuild war-damaged infrastructure and other facilities in Iraq.
“Chinese companies wishing to join the agreement will executive infrastructure and rebuilding projects elected by Iraq as per its own terms,” Cabinet Advisor Mudhar Saleh told Ali- qtisad at the time.
“AspertheagreementwithChina,manystra- tegic projects will be undertaken in Iraq in the coming period and Kurdistan will have a share of these projects,” Al-Saffar explained.
Iraq wants to build new refineries as its oil processing capacity was severely curtailed by damage to its largest plant in Baiji, north of Bagh- dad, when it was captured by Islamic State mil- itants in 2014. The Baiji facility was recaptured the following year and resumed partial opera- tions in 2015.
Iraq currently relies on the Doura refinery in Baghdad and Shuaiba plant in the south of the country to cover its needs. In addition to the Kurdish project, Iraq has also mooted plans for refineries in the port of Fao on the Gulf, the southern region of Nasiriya, the western Anbar province and Qayara, near the northern city of Mosul. ™
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