Iraq To Boost Refinery Capacity

Iraq plans to increase the processing capacity of its Qayara refinery in the northern part of the country to 90,000 bpd, Argus Media reported. Currently, the capacity of the Qayara facility is just 20,000 bpd.

The report follows another one from a week ago, which said Baghdad had plans to boost the capacity of the Baiji refinery, also in the north, to 280,000 bpd in response to the slump in oil prices, oil minister Ihsan Abdul Jabbar said. Currently running at a capacity of 75,000 bpd, the refinery would be brought up to 140,000 bpd over the next few months and then to 280,000 bpd.

"In the light of the decline in oil prices and the difficulties facing the Iraqi economy, the ministry is relying on refining, gas, and petrochemical industries, which are considered an economic pillar to sustain and enhance national development," the minister said in a new statement, as quoted by Shafaq news agency.

Baiji is Iraq's largest refinery, processing a third of the oil output that stays on the domestic market for local consumption. Before the Islamic State insurgence, the facility had a nameplate capacity of 310,000 bpd, but the war that followed the insurgence reduced this significantly as it became the target of attacks. Since then, most of the capacity has been brought back online, but Iraq still cannot satisfy all domestic demand for fuels with its local refining capacity.

Qayara is another large processing facility, but Iraq has had plans to boost its domestic refining capacity to 1.5 million bpd by 2022 from less than 900,000 bpd now. It has sought investors for whole new refinery projects but has had no success with these. According to the Argus report, there is just one new refinery project under development currently, and this is the Kerbala refinery, with a capacity of 140,000 bpd. It is being fully financed from the state budget.

By Charles Kennedy for Oilprice.com

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