Last Thursday, the Iraqi Oil Ministry concluded a preliminary agreement with a Chinese company to establish an oil refinery in the southern province of Basra, with a capacity of 300,000 barrels per day and a cost of up to 7 billion US dollars, and it will be the largest of its kind in the region.
In the details, Iraqi Oil Minister Ihsan Abdul-Jabbar told reporters on the sidelines of the signing of the agreement in Baghdad that the South Refineries Company of the Ministry of Oil signed a preliminary contract with Hualu, a subsidiary of CNCEC.
The CNEC China, will establish the Faw oil refinery in Basra Governorate.
He added that the refinery has a capacity of 300,000 barrels per day, and its cost is between 7 and 8 billion US dollars, noting that the second phase of the project will be the establishment of a petrochemical complex, without referring to specific timings.
Minister “Abdul-Jabbar” indicated that the technical and engineering study has been prepared since 2015, and 4 international companies have submitted to invest in the project, and the Chinese company won it.
For his part, the representative of the company in Iraq, “Ahmed Abdul Latif”, said that the company will implement the project according to the best international technologies, indicating that the project will be the first and largest project of its kind in the region.
He explained that the second phase of the project will be the construction of a petrochemical complex, with a production of 3 million tons annually, and an investment cost of $12 billion.
He added: “The project would significantly reduce the import of oil derivatives and provide job opportunities for Iraqis”.
Government estimates indicate that Iraq imports $5 billion annually in oil derivatives, to meet the local need, which is estimated at 600,000 barrels per day.
In 2010, Iraq developed a long-term plan to build oil refineries, one in Dhi Qar Governorate and the other in the southern city of Maysan, with a production capacity of 300,000 barrels per day and 150,000 barrels per day, respectively.
The plan also includes building a refinery in Kirkuk, northern Iraq with a capacity of 150,000 barrels, and in Karbala, southeast with a capacity of 140,000 barrels per day.