Ministry prepares for Koya refinery award

26 May 2006

State Company for Oil Projects (SCOP), the engineering arm of the Oil Ministry, has held final clarification meetings with firms for the contract to build a grassroots refinery in the Koya area, some 60 kilometres northeast of Kirkuk. The refinery is one of three the ministry is hoping to push forward now that the new cabinet has been formed (MEED 27:1:06).

The bidders are understood to include Canada's OGI Group, Prague-based Chemoprojekt with the local KAR, the UK's Dynamic Processing Solutions (DPS) with a company identified as Zaab, the local Specialised Oil Services and an unidentified US firm. SCOP also received alternative proposals from two other firms identified as Sisco and UPM.

The project is moving ahead after the ministry came to an agreement with the US' UOP to license technology for the refinery. The ministry said in mid-April that it would self-finance the 70,000-barrel-a-day (b/d) refinery at a cost of about $400 million. The scope of works includes engineering, procurement, supervision of erection and commissioning and testing of process units, tank farms, offsite facilities, utilities and pipelines. There is also an option to carry out the construction package. SCOP has completed the initial front-end engineering and design (FEED) work. The refinery will produce hi-octane member and regular gasoline, kerosene, gas-oil and fuel oil.

SCOP is also finally moving ahead with plans to build a 140,000-b/d grassroots refinery at Hindeya, between Karbala and Najaf. The estimated $1,000 million project had originally been located in Nahrain, but was relocated due to the ongoing insurgency to the south of the capital. According to the ministry, three international firms have been asked to carry out design work with a view to inviting companies to bid by the end of July. Like Koya, the project will be funded by the government's estimated $4,500 million allocation from the national budget for the hydrocarbons sector (MEED 21:10:05)In early May, the ministry received bids from nine international firms for the feasibility study and FEED for the estimated $2,000 million 300,000-b/d grassroots crude oil refinery near Nasiriyah in the south. The successful bidder will also carry out a study into how the project can be financed. A tender is scheduled to be issued by the end of the year (MEED 12:5:06).

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