Iraq has invited Iranian firms to bid for contracts to build at least four oil refineries across the country, Iraq's oil ministry said on Wednesday in a sign of growing ties with the United States' regional foe. "Today, the Iranian firms have been invited to bid in building refineries which the ministry has already announced it was planning to build," spokesman Asim Jihad told Reuters.
Mustafa Alani, senior consultant and director of the security department at the Dubai-based Gulf Research Centre said the invitation for Iran to bid was probably politically motivated. Iran was unlikely to be able to meet Iraq's refining needs. "It doesn't make sense," he said. "First of all Iran doesn't have the know-how and the technology. Secondly, they are suffering from their own problems. They are short of supplies themselves and are looking at rationing oil products."
Iraq wants to build at least four refineries to help it solve chronic fuel shortages. The ministry said last year that it wants to build Nahrain, just south of Baghdad, with a capacity of 140,000 barrels per day. A second refinery at Kuya in the north, is projected at 70,000 bpd. Iraq also plans to build a refinery in Nassiriya, south of Iraq, for export purposes with a capacity of 300,000 bpd and another in southern Amara.
Jihad said that Oil Minister Hussain al-Shahristani agreed with the Iranian ambassador on Wednesday to activate an agreement to build a pipeline to carry about 200,000 bpd of Iraqi crude to Iran's southern refineries.
"They have agreed that the technical committees should begin within days mutual visits to discuss costs and the time they need to build the pipeline," Jihad said. "The Iranians will buy the crude based on market price." |