Iraq prequalifying for Basra refinery upgrade

04 November 2013

New fluid catalytic cracker unit planned for new complex near existing Basra refinery

Iraq’s South Refineries Company (SRC) has asked international engineering, procurement and construction (EPC) firms to prequalify for a contract to upgrade the Basra refinery in the south of the country.

Prequalification documents are available for a fee of $100 and responses are due to be submitted by 20 November. The EPC tender is expected to be launched in early 2014.

The tender has taken some time to reach this point. EPC contractors in Iraq had been expecting it to be released back in June 2012.

A contract is now expected to be awarded by September 2014, with the total EPC period is expected to last 52 months. Under this time table, the refinery could begin commissioning by September  2018, and commercial operations by February 2019.

The project’sfront-end engineering and design (feed) has been completed by Rome-based APS Engineering, a subsidiary of Japan’s JGC. France’s Axens was selected to provide a technology licence for the new FCC unit in June 2011.

Built in the early 1970s, the Basra refinery has two atmospheric distillation units with a total capacity of 140,000 barrels a day (b/d), and three 10,000 b/d distillers. Operational capacity, however, has been reduced to about 85 per cent due to the lack of spare parts for maintenance during the sanctions period and damage cause by unreliable power supplies.

The Oil Ministry hopes to increase gasoline production at the refinery by installing new units, including a new 30,000 b/d fluid catalytic cracking (FCC) unit at a new complex just outside the existing refinery.

The project will be financed in part by a $430m loan from the Japan International Cooperation Agency (JICA) approved in October 2012.

Iraq currently consumes about 600,000 b/d of refined petroleum products, according to oil producers’ group, Opec with growth of about 3 per cent a year. The country’s Iraq’s refining capacity currently stands at more than 800,000 b/d, which should be more than enough to meet domestic requirements. However, years of war, sanctions and sabotage have led to reduced capacity and forced Iraq to import products.

The Oil Ministry has taken a two-pronged approach to redeveloping its downstream refining sector, with five new grassroot refineries planned, along with the expansion and rehabilitation of its three existing refining complexes.

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