Iraq's State Oil Company Selects Project Management Consultant for Karbala Refinery Project

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Researched by Industrial Info Resources India (Delhi, India)--Iraq's State Company for Oil Projects (SCOP) (Baghdad, Iraq) and Refinery of Karbala Corporation (RKC) (Dubai, UAE) have selected French oil and gas services group Technip SA (Euronext: TEC) (OTCQX: TKPPY) (Paris, France) as Project Management Consultant (PMC) for the upcoming 200,000-Barrels Per Day (BBL/d) Karbala Refinery.

The French company which has done the Front End Engineering Design (FEED) for the refinery in 2010 will soon release tender inquiries for selection of Engineering, Procurement and Construction (EPC) firm. The $6.5-billion project, envisaged in early 2008, is a part of Iraq government's plan to ramp up its refining production. Howbeit, the project since its inception has seen recurrent delays, primarily due to political turmoil in Iraq.

Technip is currently preparing the contracting documents along with SCOP and RKC. Technip intends to release the tender documents by the third quarter of this year. The project is due to be completed within three years from the award of EPC contract. According to SCOP, the refinery located 100-kilometer south of Baghdad on a six square kilometre plot of land will be the first of its kind in Iraq with secondary processing units helping it achieve almost 100% conversion rates.

Iraq has thirteen refineries with a combined crude processing capacity of 886,000 BBL/d. Out of the thirteen; nearly 74% of the capacity rests with three refineries, Baiji Refinery, Doura Refinery and Basra Refinery. The remaining refineries are very small and ravaged by the war. These refineries keep facing operational difficulties, making it difficult to operate on full throughputs.

Due to shortfall in refining capacity, Iraq is forced to import refined petroleum products which cost the government exchequer almost $6 billion annually. To reduce dependence on imports, Iraq has planned to build four new refineries, Karbala, Meissan, Nasiriya and Kirkuk with a combined capacity of 740,000 BBL/d.

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