Monday, September 03, 2007


Iraq seeks investors for $1 bn. upgrade on petrochemical plant

(Zawya Dow Jones) -- Iraq is seeking investors for a possible $1 billion upgrade of a petrochemical plant in Basra and may build a new $2 billion facility in the country's northern or central regions, an industry and minerals ministry official said Sunday. The Basra plans involve a $120 million upgrade of the existing 500,000-ton-a-year olefins complex, which may be developed further by investing $1 billion into the upgrade, Iraq's industry and minerals minister Fawzi Al Hariri said at a conference in Dubai.
"We are in discussions with international players," Al Hariri said. Talks have been held with Royal Dutch Shell PLC
, Chevron Corp and the Dow Chemical Company, Al Hariri said, adding that regional companies including Saudi Basic Industries Corp. are also interested. The ministry hopes to conclude negotiations as early as the end of the year.
"We are also considering a second facility, completely new, in a different part of the country. Maybe in the north or central region," Al Hariri said. That project would be worth at least $2 billion and produce about 1 million tons a year of ethylene, a natural gas derivative, and olefins, the minister said. Gas feedstock for the complex would be sourced from existing gas resources, possibly by capturing associated gas that is currently being flared.
Iraq, which holds the world's third largest oil reserves, loses about $400 million each year from flaring associated gas and hopes to tap those resources for industrial use, including for petrochemicals, Al Hariri said. The new plant may be located in one of the three Kurdistan Regional Government provinces or in the Anbar province, Al Hariri said.
However, the ultimate decision on the plant's location may depend on the security situation on the ground. Al Hariri said security-related expenditure may add between 10 and 40% to the cost of a project. "We hope to start initial discussions by year-end" with interested parties, Al Hariri said. Both projects would be offered on a 50:50 joint venture basis. "Timing is of the essence because similar facilities are planned in other regional countries," he added.

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