Fuel for Thought
Iraq Announces Plans for Significant New Petrochemical Plant
May 17 2023
In an ambitious move, Iraq is gearing up to initiate the Nibras project, a substantial petrochemical venture valued at approximately $8.5 billion. The project's manager, Hussein Ali, confirmed that the launch is imminent. This collaborative enterprise with Royal Dutch Shell will involve the erection of the region's most extensive petrochemical plant, as reported by Zawya Projects.
Destined to be based in Basra, the petrochemical facility will boast an impressive annual production capacity of nearly 1.8 million tonnes. With projected net earnings close to $1.4 billion per year, it's set to become the world's fourth-largest petrochemical complex, thus marking a significant achievement for Iraq's energy sector.
Royal Dutch Shell will retain 49 percent ownership of the project, while the remaining 51 percent will be under the purview of Iraq's Oil and Industry Ministries. The Nibras project, initially signed off in 2015, has faced significant setbacks, including financial constraints and internal disputes. However, it now promises to enable Iraq to optimize its abundant gas resources and trigger a cascade of ancillary projects in Basra, thereby consolidating Iraq's position as a major petrochemical producer.
Ali anticipates the cornerstone of the project to be laid in the forthcoming days. The completion timeline for the project is estimated to span 5-6 years, and it's projected to yield total revenues approximating $90 billion during its 35-year operational lifespan.
In a parallel development, Iraq also revealed expectations for TotalEnergies to kick off a long-awaited $27 billion project encompassing oil, gas, and renewable energy in the latter half of 2023. This announcement came after finalizing ancillary contracts with a state oil company. Basim Mohammed, the Iraqi Deputy Oil Minister for upstream affairs, mentioned that TotalEnergies and the Basra Oil Co are in the final stages of sealing necessary contractual procedures and documents to activate the contract.
The Nibras project is another step forward in Iraq's effort to tap into its extensive gas resources and transform into a leading petrochemical producer in the region. It's expected to generate numerous projects in Basra and significantly contribute to Iraq's economy over its operational period. This initiative also marks a milestone in Iraq's journey to becoming a primary source of petrochemicals in the region, signalling the nation's commitment to the advancement of its energy sector.
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