Erbil strives to meet domestic fuel demand

06 November 2014

Baiji refinery outage highlights importance of refining expansion in Iraqi Kurdistan

When fighting cut off supplies from Iraq’s largest oil refinery at Baiji in June, the Kurdistan region in the north of the country was hit by gasoline shortages within weeks as people rushed stock up on fuel.

The situation brought into light the importance of fuel independence, an issue that was already well on the agenda in Erbil.

While Iraqi Kurdistan is set to become a significant crude oil producer in the coming years, the region’s refining capacity is far from meeting the requirements for domestic fuel needs.

Its two refineries are currently able supply under 75 per cent of domestic gasoline demand and consumption is expected grow by as much as 15 per cent a year.

In July, when Erbil was hit by gasoline shortages, the Kurdistan Regional Government (KRG) said it would ration fuel supplies and encourage private companies to import gasoline to make up for the Baiji outage.

Minister of Natural Resources Ashti Hawrami announced that two new refineries would be built at Dohuk and Garmiyan.

Meanwhile, the Kurdistan region’s existing refiners are also looking to expand capacity. The local Qaiwan Group, which operates the Bazian refinery in Sulaimaniyah province, is preparing to nearly triple the facility’s capacity. It will refine crude through a new pipeline from the nearby Taq Taq and Bina Bawi oil fields.

Kurdish leaders are looking to increase the region’s autonomy from the rest of Iraq. Fuel self-sufficiency is a key strategy to achieve further independence.

With the Baiji refinery still under siege from Islamic State in Iraq and Syria (Isis) fighters, Erbil has learned to cope without fuel supplies from the rest of Iraq, but still has a long way to go to meet its own needs.

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