Meed | Security increases Iraq refinery project cost

Security increases Iraq refinery project cost

2 November 2023

Provision of security services for the Basra refinery upgrade project has added between 15 per cent and 20 per cent to the cost of the project, according to Farhan Mujib, the representative director and president of the Japanese engineering firm JGC.

“It is quite significant because it is across the logistics chain,” he told MEED in an interview. “It adds between 15 and 20 per cent in terms of costs.”

Mujib said that security costs included escorts for the transportation of equipment and materials, security for transporting workers, camp security and security at the refinery site.

All the prefabricated modules for Iraq’s Basra refinery upgrade have been completed. They are expected to be delivered to the construction site by the end of the year as the project progresses.

The project is being developed on a greenfield site next to the existing refinery and is expected to add 100,000 barrels a day (b/d) of refining capacity.

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

The client on the project is Iraq’s state-owned South Refineries Company (SRC) and the main contract is estimated to be worth £3.78bn ($4.59bn).

The contract signed by JGC uses the engineering, procurement, construction and commissioning (EPCC) model.

EPCC works on the project began on 15 February 2021. The project site is about 12 kilometres east of Iraq’s southern city of Basra.

The upgrade project will install new facilities on land adjacent to the existing Basra refinery, including a vacuum distillation unit and a diesel desulphurisation unit.

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Wil Crisp