Iraq's Deputy Prime Minister for Energy Affairs Hussain al-Shahristani Saturday detailed his country's ambitious plans to expand refining capacity and become a net exporter of refined products.
Speaking during during a tour of the Basra refinery, Shahristani said Iraq was on track expand its existing refineries and add 750,000 b/d of capacity at new refineries.
"Iraq is going to build new refineries, modern and sophisticated as in the case of the four refineries in Karbala, Kirkuk, Missan and Dhi Qar (provinces)," Shahristani, who was oil minister from mid-2006 until late 2010, told reporters.
Iraq currently struggles to meet domestic demand for quality fuels, even with imports, and has embarked on an effort to expand its refining sector.
Earlier this year amendments were passed to a 2007 private refineries investment law which increased incentives such as guaranteed, discounted crude supply and the right to sell domestically or export at market prices. There have been no takers so far.
Iraq has also commissioned a Front End Engineering and Design contract for the four new refineries and is working to expand current infrastructure.
The Basra refinery currently has a nameplate capacity of 140,000 b/d but a 70,000 b/d unit is being constructed and will come on line "in coming months," Shahristani said.
There is also work under way to install "other new units to improve the quality of oil products produced. Currently there is work being conducted at an isomerization unit to raise the octane number of the gasoline," he said.
Iraq also lacks enough transit infrastructure. For example, the Dora refinery in Baghdad has a 210,000 b/d nameplate capacity but is stuck at around 100,000 b/d because of a lack of crude supply.
In Beiji, in northern Salahaddin province, the country's biggest refinery with a capacity of 310,000 b/d has been hit not only by older machinery, but also by terrorists who detonated bombs below two key units on February 26.
The refinery is not fully operational yet but repairs are ongoing.
Shahristani said the Karbala refinery project was being discussed with "European investors," a group Platts understands is led by Italy's Eni.
Deputy Oil Minister Ahmad Shamma said the upgrade of refineries included cooling units and new service units, a treatment plant and a cracking unit double gasoline production.
