PROJECTS: Iraq and Japan sign new loan agreement for modernization of Basra refinery

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Iraq and Japan have signed a draft loan agreement of $ 300 million for the Basrah refinery modernization project, an Iraqi government official said.

Abdul-Zahra Al-Hindawi, spokesperson for the Ministry of Planning, told Zawya Projects that the draft agreement for the third loan was signed by officials from the Iraqi ministries of planning and finance and the Japanese Agency. International Cooperation (JICA).

The Iraqi side included the directors of the planning and international cooperation departments of the planning ministry, the director of the public debt department of the finance ministry, the general manager of the South Refineries Company (SRC) and the head of Basra refinery phase 3 project.

In October 2020, the SRC and the Iraqi Ministry of Petroleum signed a contract with JGC Corporation to start construction of the Fluid Catalytic Cracking (FCC) complex at the Basra refinery as part of the ODA loan project. development) of JICA.

JIC said it had entered into 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 of the loan of 110,000 million yen [$994 million].

The JICA statement said the project would “unleash” the potential of the Iraqi refining sector to produce larger volumes of high value-added products such as gasoline, diesel and kerosene.

Work on the site began in February 2021.

The director general of the international cooperation department, Saher Abdul-Kazim Mahdi, said the project would bridge the gap between local supply and demand for petroleum products, which are currently imported. the auxiliary plant and two hydrogenation units to process light diesel.

The director of the public debt department at the finance ministry, Khaled Salah, said the ministry said the signing of the minutes underscores the importance the government places on the project.

SRC chief executive Hussam Hussein said the project is important for switching from fuel oil to higher value distillates like gasoline, kerosene and diesel.

JGC Corporation, the engineering, procurement and construction contractor for the project, said in August 2020 that the project will install, on land adjacent to the existing Basra refinery, an FCC unit, a vacuum distillation unit. and a diesel desulfurization unit, thus increasing production to 19,000 barrels / day of gasoline and 36,000 barrels / day of diesel, making it possible to reduce the gap between supply and demand for petroleum products

JGC said the contract was worth around 400 billion yen[3,6 milliards de dollars].[$36billion)[billion)

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(Reporting by Majda Muhsen; Editing by Anoop Menon)

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