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Iraq has signed a contract worth $800m to expand the oil refinery in the city of Al-Diwaniya, according to a statement released by the office of Iraq’s Prime Minister.

The project includes the addition of an atmospheric distillation unit with a capacity of 70,000 barrels a day (b/d), bringing the total production capacity to 90,000 b/d, according to Prime Minister Mohammed Al-Sudani.

It also incorporates hydrocracking units, gasoline upgrading, isomerisation and other essential service units.

Al-Sudani said that the project is part of the government's efforts to modernise the oil industry, enhance product quality and increase production capacity.

According to Al-Sudani, funds for the project have been secured, and the project contractor is set to commence operations within days.

The project includes the addition of:

• A liquefied gas processing unit with a capacity of 180 tonnes a day
• A naphtha hydro-treating unit with a capacity of 18,000 b/d
• A gasoline upgrading unit with a capacity of 10,000 b/d
• A naphtha isomerisation unit with a capacity of 8,000 b/d
• Power generators with a capacity of 10 MWh
• Other essential units

Last month, Iraq announced the discovery of a new oil field in the southern East Baghdad group of fields that may add 2 billion barrels of medium and light crude to the country’s oil reserves.

State-owned Midland Oil Company reported the find, which was made in collaboration with EBS, a local subsidiary acting for China’s ZhenHua Oil.

The discovery supports the country’s plan, announced by Iraq’s Oil Minister Hayan Abdul-Ghani a year ago, to boost Iraq’s oil reserves to 160 billion barrels by 2028.