EXCLUSIVE: Iraq awards $1.8bn refinery contract to Chinese company

27 February 2018
The project will be executed on a BOT basis

Iraq’s Oil Ministry has signed a build-operate-transfer (BOT) contract with PetroChina, with its subsidiary Sepco appointed as the engineering, procurement and construction contractor.

The refinery contract is worth $1.8bn, according to information obtained by the project-tracking service MEED Projects.

Under current plans, it will be situated in the city of Samawah, 280 kilometres southeast of Baghdad.

The refinery will have a capacity of 70,000 barrels of oil a day and is expected to be completed before the end of 2021.

The scope of the project includes:

  • A crude distillation unit
  • Isomerisation units
  • Hydrocrackers
  • Flue gas desulphurisation units
  • Liquefied petroleum gas plant
  • Pipelines
  • Storage tanks
  • Buildings
  • Instrumentation, control and communications systems
  • Offsites and utilities

Earlier this month, Iraq’s Oil Ministry invited companies to submit expressions of interest to finance and build a new refinery in the northern town of Qayara in the Nineveh governorate.

Companies have until 15 May to submit expressions of interest for the refinery scheme.

The proposed refinery is planned to have a capacity of 100,000 barrels a day (b/d), and will be developed under a build-own-operate or build-own-operate-transfer basis, as per Iraq’s amended law on investments in refinery projects.

The rebuilding of refineries and development of new facilities is a key component of the Iraqi government’s reconstruction plan, and is necessary to process the 4.7 million b/d of crude that Baghdad produces for crucial oil export revenues.

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