China Petroleum Engineering & Construction Corporation (CPECC) has been awarded a contract by Japan’s JGC as part of the ongoing Basra refinery upgrade project in Iraq.

The Chinese contractor received the contract for the project on 10 January, according to a statement.

Under the contract terms, CPECC will be the engineering, procurement, construction and commissioning (EPCC) general contractor. It is the first time that CPECC has won a downstream contract in Iraq’s refining and petrochemicals sector, according to the statement.

It is also the first time CPECC has worked with JGC on a large-scale project that is not in China.

The Basra refinery upgrade project is located 15 kilometres (km) southwest of Basra City, the capital of Basra Province, and 2km north of the old Basra refinery.

It will be constructed in two phases. In its statement, CPECC said: “The project is mainly to expand the capacity of the Basra refinery and upgrade the quality of refined oil.”

In the existing refinery area, a catalytic cracking unit with a daily processing capacity of 34,500 barrels and a vacuum distillation unit with a daily processing capacity of 55,000 barrels will be added.

A diesel desulfurisation device with a daily processing capacity of 40,000 barrels will be added to expand the refinery’s production capacity and improve the quality of refined oil to meet market demand and the latest environmental protection standards.

JGC received the letter of award for the main contract for the Basra refinery upgrade project’s fluid catalyst cracking unit package in August 2020. The official contract signing ceremony was held in Baghdad on 1 October 2020.

It plans to start trial operations at the refinery in 2025, according to the statement from CPECC.

The company's statement said: “CPECC has been tracking the project since 2018. During this period, the company’s main leaders, the market development department and the Middle East company communicated and promoted with JGC’s senior management and project team at multiple levels, providing strong support for the bidding.”

The client on the project is Iraq’s state-owned South Refineries Company (SRC), and the main contract is estimated to be worth £3.8bn.

The contract signed by JGC uses the EPCC model. EPCC works on the project began on 15 February 2021.

In April 2021, France’s Axens won a contract to provide four process technologies to SRC for the Basra refinery upgrade project.

The technologies that SRC selected are:

• Diesel hydro-treatment unit (Prime-D)
• Vacuum gasoil (VGO) hydro-treating unit
• VGO fluid catalytic cracker unit
• Oligomerisation unit (polynaphtha)

In addition, Axens will provide catalysts and adsorbents and proprietary equipment, training and technical services.

In October last year, MEED reported that a civil package that Turkey’s Tekfen Construction is executing as part of the Basra refinery upgrade was on track to be completed in the first quarter of 2023.