Iraq-Italy Sign Preliminary Refinery Agreement
Iraq's oil ministry has inked a preliminary pact with an Italian group for a refinery to produce 200,000 barrels per day of gasoline and diesel fuel for the domestic market, an official said.
"This is a six-month contract with the Karbala Refinery Corporation (KRC) during which the consortium must complete procedures ahead of starting the project," Ahmed Shamaa, Deputy Oil Minister in charge of refineries, said in a statement late Tuesday.
"The refinery will cover six square kilometers, will cost $6.5 million and be the most technologically advanced in Iraq," Dean Michael, the executive director of KRC, said in an email to Agence France Presse.
The Italian company Saipem will provide the technical support for the refinery, the first to be built since the late 1980s. The KRC is committed to begin production 48 months after signing the final contract.
Michael said the refinery is being built on a "BOO" (build-own-operate) basis, a public and private partnership in which the private company builds and operates the project with state support.
Iraq intends to build four refineries to achieve self-sufficiency. It currently imports from 5,000-7,000 tons per day of gasoline and diesel.