Design of Kerbala Refinery Needs to be Changed

Iraq's deputy oil minister, Ahmed Shamma (pictured), told the Iraq Refinery conference in London on Tuesday that the FEED (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, reports Dow Jones.

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, but that plant has now decided to use natural gas instead.

A consortium including Italy's Saipem and Eni made a preliminary agreement in July 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 did FEED for the Kerbala project, but according to the report, Shamma did not 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.

(Source: Dow Jones)

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