Iraq to restart construction of Maysan refinery within 30 days

08 January 2018
The project’s latest construction delay has been caused by a shortage of water, according to the country’s Oil Ministry

Iraq’s Oil Ministry has confirmed directing the operating company of its new refinery at Maysan to restart construction within 30 days.

The project’s execution was delayed due to a shortage of water and the Oil Ministry will now coordinate with the Ministry of water Resources to provide adequate water to the Maysan International Refining Company (MIRC), Iraq’s Oil Minister Jabbar Al-Luiebi has said, according to the ministry’s website.

The Maysan refinery, in southeastern Iraq bordering Iran, is meant to have a refining capacity of 150,000 barrels a day when operational.

According to regional projects data provider MEED Projects, the Maysan refinery project is due to be completed by 2019-end.

The main engineering, procurement and construction (EPC) contract for the project, which has been valued between $2.5-3bn, was awarded to a joint venture of Swiss firm Satarem and China’s Wahan Company in 2016.

France’s TechnipFMC is both the project consultant and the front-end engineering design (Feed) contractor.

Al-Luiebi has stressed upon the contractors the need to adhere to the project schedule, and has warned that the ministry could cancel the its contract in the event of future delays.

The Maysan refinery project has been mired in controversy and has faced several delays since its inception. The Oil Ministry has been embroiled in a corruption scandal for awarding the EPC contract to Satarem, a relatively unknown engineering firm, supposedly based in Switzerland, with no track record of executing refining projects. Satarem’s own chief executive has been allegedly convicted for dubious business dealings in the past.

The ministry has been under scrutiny from a parliamentary body and other parliamentarians and oil executives for supposed misconduct and incompetency over executing the refinery project.

The Oil Ministry has insisted along the way that the Maysan refinery is a key project to raise Iraq’s production of petrochemicals production to meet national demand, as well as to export refined products.

It claims to have prepared several refinery projects in Iraq to attract foreign investments in the country’s downstream sector.

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