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28 March 2024

Estimated cost for building Iraq refineries $20bn

Iran to sign gas export deal with Bahrain soon. (AFP)

Published
By Reuters

The estimated cost of building four new refineries in Iraq to add some 740,000 barrels per day of refining capacity is more than $20 billion, Iraqi Oil Minister Hussain al-Shahristani has said.

Shahristani gave the estimate to reporters at a conference in Baghdad with oil company executives at which Iraq's Oil Ministry laid out its plans for the new refineries.

The conference is the first step before inviting companies to tender for the refineries, which will be either 100 per cent privately owned, or built as public-private joint ventures, he said.

"We are looking for real partners, and in any percentage the partner wants. The doors are open to any kind of co-operation," Shahristani said. The plan for new refineries would be another stage of a multibillion-dollar revamp of Iraq's oil sector, left dilapidated after decades of war, sanctions and neglect.

Iraq's capacity to refine fuels such as diesel and petrol has been ravaged by underinvestment, and it has been forced since the 2003 US-led invasion to buy imported fuels to meet the growing gap between supply and domestic demand.

Baghdad has already signed a series of deals with global oil companies to boost its crude output to 12 million bpd from 2.5 million bpd in six to seven years.

Shahristani said the Oil Ministry would have a clearer idea about the eventual cost of the four new refineries after receiving design and feasibility studies.

Iraq has eight oil refineries with a capacity of 659,000 bpd. It produces about 453,000 bpd of refined products and uses 589,000 bpd, according to the OPEC website, although Shahristani said last year that Iraq had attained self-sufficiency in refined products.

Iraq plans to boost its refining capacity to 1.5 million bpd in the next five years by building the four new refineries and overhauling existing ones.

The ones to be renovated are Baiji, north of Baghdad, the Doura refinery in southern Baghdad and the Basra refinery in the south.

It wants to build one of the new refineries in Nassiriya, southern Iraq, with a capacity of 300,000 bpd, a second one in the northern oil city of Kirkuk with a capacity of 150,000 bpd, a third at Maysan in the south, with 150,000 bpd in capacity, and the fourth in Karbala with 140,000 bpd of capacity.