Baghdad-based Eridu Company for Oil Services (Ecos) is seeking investors for a planned new refinery at Khor al-Zubair in the south of Iraq.
The planned 400,000 barrels a day (b/d) refinery is part of a wider long-term scheme, including a petrochemicals complex, which will be carried out in four stages. Ecos is inviting investors for the first phase covering the hydro-skimming refinery.
Based on an in-house pre-feasibility study in 2006, Ecos estimates the total capital cost for the project at $5.3bn. Three downstream petrochemicals plants would cost $11-13bn in future stages.
According to a source close to the scheme, Ecos submitted the report to the US’ FosterWheeler in 2007. It will ask FosterWheeler to update the report when investors are lined up. FosterWheeler could not be reached for comment.
“Although we prefer the investor to fund the refinery, Ecos accepts the funding by loan from the lender”, the company said in a document obtained by MEED.
The company notes it “does not have any collateral for the loan”.
Ecos is yet to purchase the required 30 square kilometre plot for the project, but says it has obtained confirmation from the Oil Ministry for the supply of crude oil for 25 years.
In 2007, the Iraqi parliament approved a law allowing for private investment in refining and for foreign or local firms to build and operate domestic refineries. Baghdad offers a 5 per cent discount on the supplied crude as an incentive to investors.
The Iraqi government is planning to build four major refineries, costing $23bn with a total processing capacity of 740,000 b/d.
The largest at Nassiriyah in south Iraq will cost almost $8bn and will have a capacity of 300,000 b/d. FosterWheeler is conducting the feasibility study and design, which is expected to be completed in the first quarter of 2012 (MEED 3:6:10).
Two 150,000 b/d refineries, costing $5bn each are planned for the Missan province in the south and at Kirkuk in the north. The US’ Shaw Group will complete the feasibility study and design for both by the end of 2011. A 140,000 b/d refinery is also being designed by France’s Technip in Karbala.