Iraq and Japan have signed a $300 million draft loan agreement for Basrah Refinery Upgrading Project, an Iraqi government official said.
Abdul-Zahra Al-Hindawi, a spokesperson for the Ministry of Planning told Zawya Projects that the draft agreement for the third loan was signed by officials from the Iraqi Planning and Finance ministries and Japan International Cooperation Agency (JICA).
The Iraqi side included the directors of planning and international cooperation departments from Ministry of Planning, the director of the Public Debt Department in the Ministry of Finance, director general of South Refineries Company (SRC) and the project manager for Phase 3 of Basra Refinery.
In October 2020, SRC and Iraq’s Ministry of Oil had signed a contract with JGC Corporation to start the construction of Fluid Catalytic Cracking (FCC) Complex in Basra Refinery under JICA’s ODA (Official Development Assistance) Loan project.
JIC had said it had concluded three loan agreements for the project. These include a 2,079 million Japanese Yen [$19 million] loan for engineering services; a first tranche loan of 42,435 million Yen [$379 million], and second tranche loan of 110,000 million Yen [$994 million].
The JICA statement said the project would “unleash” the potential of Iraq’s refining sector to produce larger volumes of the high-value outputs such as gasoline, diesel and kerosene.
Work on the site began on February 2021.
The Director General of International Cooperation Department Saher Abdul-Kazim Mahdi said the project would meet bridge the local demand-supply gap for oil products, which are currently being imported He added that the project would enhance Basra Refinery’s through the introduction of a cracking unit in the auxiliary plant and two hydrogenation units to treat light gas oil.
Director of the Public Debt Department in the Ministry of Finance, Khaled Salah said the Ministry said the signing of the minutes underscores the importance assigned by the government to the project.
SRC’s Director General Hussam Hussein said the project is important for switching from fuel oil into higher value distillates like gasoline, kerosene and diesel.
JGC Corporation, the project’s Engineering, Procurement, Construction contractor, said in August 2020 that the project would install, on land adjacent to the existing Basra refinery, FCC unit, vacuum distillation unit, and diesel desulphurisation unit, thereby increasing production to 19,000 barrels/day of gasoline and 36,000 barrels/day of diesel fuel, making it possible to reduce the gap in supply and demand for petroleum products
JGC said the contract value was approximately 400 billion Yen [$3.6 billion).
SDC Deal ID: 4215037158
(Reporting by Majda Muhsen; Editing by Anoop Menon)
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