Iraq’s beleaguered refinery expansion programme received a boost this week with the announcement of a new contract on the Basra refinery upgrade project.

The scheme is one of a number of major refinery projects planned in Iraq that have so far failed to reach the construction phase.

The state-owned South Refineries Company (SRC) awarded a project management consultancy (PMC) contract to France’s Technip in partnership with Japanese engineering consultant Unico.

This is a sign that SRC will now push towards awarding an engineering, procurement and construction (EPC) contract in an attempt to complete the estimated $1.5bn project by the end of the decade.

In August 2013, Baghdad announced plans to increase the country’s refining capacity to 1.45 million barrels a day (b/d) by the end of the decade, but this is looking increasingly difficult to achieve.

Current installed capacity stands at just over half the target amount, at about 886,000 b/d, and many of the country’s planned refinery expansions are stalling.

Plans have been drawn up to renovate several existing refineries and build new ones at Nasiriyah, Karbala, Missan, Kirkuk and Qayyarah.

If executed, the refinery projects will increase gasoline production and help to meet the country’s rapidly growing demand for vehicle fuel, but so far only the Karbala refinery has reached the EPC phase.

It saw a $6.04bn contract to build the facility awarded to a group of South Korean contractors in April 2014.

Technip was also appointed PMC for this project less than a year before the EPC was awarded.

There have been recent reports that the Karbala New Refinery construction is facing delays, but it remains leagues ahead of most of Iraq’s planned downstream projects, many of which remain on the drawing board.

The proposal to build a new refinery in Nasiriyah appears to have ground to a halt after a licensing round that has been continually delayed.

The ministry’s plans to build a 150,000-b/d refinery at Missan in the southeast of the country also appear to have hit a roadblock. It too is awaiting re-tender after the contracting process was scrapped in 2014.

Meanwhile, refinery projects planned in northern Iraq, in Kirkuk and Qayyarah, are currently out of the question due to the continued conflict with the Islamic State in Iraq and Syria (Isis).

Iraq’s largest refinery at Baiji, north of Baghdad, has been the focus of fighting between Isis and Iraqi security forces.

Baghdad reportedly retook most of the site on 18 April after Isis seized parts of the complex. There has been an Isis presence in the area since the Islamist militant group swept across the north of the country in June 2014.

The development of Basra will at least, in the long term, go some way to meeting gasoline demand in the relatively stable south of Iraq. With few other projects progressing, the country will be forced to import refined products until at least the end of the decade.

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