UPDATE: Design Of Iraq's Proposed Kerbala Refinery Needs Changing-Minister
April 17 2012 - 10:09AM
Dow Jones News
The front end engineering and design of Iraq's 140,000 barrel a
day Kerbala refinery will have to be changed to reduce the fuel oil
output of the proposed plant, in another setback to the struggling
expansion of Iraq's domestic fuel production, said the country's
deputy oil minister Ahmed Shamma Tuesday.
The Kerbala plant, one of four major new refineries planned by
the Iraqi government, was originally designed to supply large
volumes of fuel oil to a nearby power plant, Shamma said at the
Iraq Refinery conference in London. That plant has now decided to
use natural gas as a fuel, meaning the design of the Kerbala
refinery will have to change to avoid producing a glut of fuel oil,
he said.
An Italian consortium, including Saipem SpA (SPM.MI) and Eni SpA
(E), made a preliminary agreement in July last year to develop the
Kerbala refinery. The agreement was only valid for an initial six
months and Shamma described talks with the consortium as
"interrupted".
French engineering company Technip SA (TKPPY) did front end
engineering and design for the Kerbala project. Shamma didn't say
if they would be doing the redesign.
Dialogue continues with one potential investor in a 150,000
barrel a day refinery in Missan province, Shamma said. There have
been initial talks over plans for a 140,000 barrel a day refinery
in Kirkuk and a 300,000 barrel a day plant in Nassiriya, he
said.
The total investment to build the four plants could range
between $24 billion and $27 billion, he said.
Iraq will encourage private companies to invest in domestic
refineries, particular international operators, by allowing them to
sell fuel they produce at international prices and market it in
their own retail network, Shamma said.
Iraq's refining throughput averaged 567,000 barrels a day last
year and is expected to reach between 600,000 and 620,000 barrels a
day this year, thanks to work to improve existing plants, said
Shamma. Capacity should reach 750,000 barrels a day by the start of
2013, due to an expansion of the Basra refinery, he said.
-By James Herron, Dow Jones Newswires; +44 207 842 9317;
james.herron@dowjones.com
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