UK oil major BP has signed an agreement with state-owned General Company for Ports of Iraq (GCPI) to build a new refined products import terminal at Khor al-Zubair in the south of the country.
The five-year contract covers the construction of a new terminal, which will replace Iraq’s current outdated terminal. BP took over the site on 30 April, Reuters news agency reports.
The current facility is geared towards the export of dry bulk goods such as fertilisers and cement, as well as liquid petroleum gas and small quantities of oil products. The new facility will be built over several phases, but imports could commence between the middle or end of 2014.
MEED reported in early 2012, that the BP was conducting feasibility studies for the import terminal as Iraq struggles to increase its domestic refining capacity. It originally looked at a swap deal, where crude oil would be exported in return for the gasoline imports.
According to Anmar al-Safi, spokesman for GCPI, BP will pay Iraq as much as $7 for each cubic metre of imported and exported refined product through the terminal.
BP is the lead developer of the giant 17-billion-barrel Rumaila oil field in the south of Iraq, along with China National Petroleum Corporation. Production capacity stands at more than 1.3 million barrels a day (b/d), with plans to reach 2.85 million b/d by 2017, although the company is in talks to scale this down to 2 million b/d.