Iraq’s Oil Ministry has awarded US-based Foster Wheeler a contract to conduct a feasibility and front-end engineering and design (Feed) for a new refinery at Nassiriyah in southern Iraq, according to a 2 June company statement.

The US engineering firm did not disclose the value of the project for the proposed 300,000 barrel a day (b/d) refinery.

Foster Wheeler will now develop the configuration of the new refinery, evaluate proprietary technologies, prepare a report covering the feasibility of the project, and prepare the Feed package for the total project.

According to Iraq’s new 2010 budget, the Finance Ministry will transfer a portion of revenues received for production and refining to the provinces where the facilities are located. This ministry will pay $1 for each barrel of oil produced and the same for refined products.

Iraq’s ageing refineries have a total design capacity of almost 790,000 b/d, although they are running well below this. According to an April report by the US’ Special Inspector General for Iraq Reconstruction an average of 276,000 b/d of crude oil was processed in the first quarter of 2010.

Outside the semi-autonomous Kurdistan region, Iraq has 13 refineries, only six of which receive enough crude oil feedstock to operate at more than 50 per cent utilisation rates.