Iraqs Oil Ministry has signed a $6bn deal Switzerland-based Satarem for the construction and operation of a new refinery in the Missan province in eastern Iraq.
The signing was announced by Prime Minister Nouri al-Maliki on 10 October for a 150,000 barrel a day (b/d), according to local press reports.
The agreement covers a 50-year build, own, operate (BOO) contract, but further details have not been announced.
The choice of Satarem for the deal has been questioned by some analysts. Based in the town of Zug in Switzerland, Satarem provides cement production and renewable energy products. The company has no known previous experience in the construction or operation of refineries.
The Oil Ministry has signed private refinery agreements before, but so far none have proceeded. Iraq signed a memorandum of understanding with Egypts Citadel Capital for a refinery in Mosul in 2011, which was given three years to prepare studies and designs.
Another deal was signed with the Refinery of Karbala Corporation, an Italian-UAE joint venture, although this too collapsed. The Karbala refinery will now being built by the government, with bids submitted for its main engineering, procurement and construction (EPC) contracts.
The planned Nasiriyah refinery, which has been linked with the upstream development of the Nasiriyah oil field looks the most likely to proceed. Iraq has prequalified dozens of firms for a bid round, which will be held on 19 December.