Iraq’s cabinet has approved the first of five planned new refinery construction contracts, with a $6.04bn deal for South Korea’s Hyundai Engineering & Construction for the engineering, procurement and construction (EPC) of a new refinery at Karbala in the south of the country.

The deal was approved on 7 January, in the cabinets’ first regular meeting of 2014, according to the governments published minutes.

Hyundai Engineering & Construction leads the consortium along with GS Engineering & Construction, SK Engineering & Construction and Hyundai Engineering, all of South Korea.

Daewoo Engineering & Construction, another South Korean firm and Spain’s Tecnicas Reunidas led the rival groups. Commercial bids were submitted to State Company for Oil Projects (Scop), a subsidiary of the Oil Ministry at the end of November.

The 140,000 barrel a day (b/d) refinery is one of five new downstream facilities planned by the government to increase its refining capacity by more than 700,000 b/d by 2019. The construction period is expected to last 54 months, ending in the middle of 2017.

France’s Technip carried out the front-end engineering and design for the scheme and is the project management consultant.

Bids are due to be submitted on 23 January for the planned Nasiriya Integrated Project, which covers the joint development of a 300,000 b/d refinery and upstream oil field development. Thirteen consortiums have been prequalified to bid.

Another of Iraq’s planned refineries faces more difficulty, however. Local media report that the parliamentary oil and gas committee has asked the Commission of Integrity, the government body which investigates corruption to investigate a memorandum of understanding signed with a Switzerland-based firm for the construction and operation of a 150,000 b/d refinery at Missan.

Questions have been raised over the suitability of the company, Satarem for the estimated $6bn refinery.