Qaiwan Group is negotiating with engineering, procurement and construction (EPC) contractors for the third-phase expansion of its refinery in the Bazian region of Iraqi Kurdistan’s Sulaimaniyah province, according to a senior executive at the company.

The local group wants to increase the facility’s refining capacity to 100,000 barrels a day (b/d) from the current 34,000 b/d by 2018.

The front-end engineering and design (feed) study for the scheme was recently completed by France’s Technip. The EPC phase will not be publicly tendered, with Qaiwan Group choosing to deal with potential contractors individually.

The scope of the refinery expansion includes a new crude distillation unit, a naphtha block, a kerosene hydrotreating unit and associated ancillary units, offsites and utilities.

Meanwhile, Qaiwan Group has received bids for a second project to build an 85-kilometre pipeline connecting Bazian to the Taq Taq and Bina Bawi oil fields in Sulaimaniyah province. The pipeline will have the capacity to carry 125,000 b/d of crude oil from the fields to the refinery.

“Evaluation is going on and we are expected to award an EPC contract soon,” says Fehmi Konyar, member of Qaiwan’s executive board, adding that bids were submitted by several companies in mid-October. The pipeline’s feed study was also carried out by Technip.

The expanded refinery will process Taq Taq crude at a higher throughput and process heavier crude from the Bina Bawi oil field mixed with condensates to maximise gasoline production.

Qaiwan took over the Bazian refinery in 2009 when it consisted of two 10,000 b/d crude distiliation units (CDU), located 20km from Sulaymaniyah city.

“At the time, the refinery was only capable of running 12,000 b/d as the feedstock was much lighter than the original design basis,” says Konyar.

Qaiwan Group then installed a pre-flush unit to remove the naphtha and make the balance of the crude suitable for processing through the existing distillation units. This increased the capacity to 34,000 b/d. A gasoline block was added to increase the octane of the naphtha and produce gasoline.

“That phase was quite critical at the time. The region was not as good as today and potential EPC contractors were not as keen on Kurdistan,” says Konyar. “It was hard for us to explain where Kurdistan is and about the infrastructure. It was a difficult time, but now we see more parties are interested in coming to Kurdistan.”

Iraqi Kurdistan has two operational oil refineries. The other facility, located 40km west of the city of Erbil, is owned by KAR Group, which has announced plans to expand the capacity of the refinery to 180,000 b/d.