Iraq’s Ministry of Oil on Dec. 30 signed an $8 billion agreement with China’s state-owned Hualu Engineering & Technology to oversee expansion of al-Faw Petrochemical Complex, allowing its refinery to process 300,000 barrels per day of crude. The expansion of al-Faw complex, along the strategic Shatt al-Arab waterway in Basra governorate, is the largest yet undertaken in the Iraqi energy sector, and is seen as facilitating a new thrust of output by the country’s oil industry. The deal is a “build-own-operate transfer” (BOOT), which means Hualu could gain effective control of the facility. Hualu is majority-controlled by the giant China National Chemical Engineering Company (CNCEC). (IraqiNews.com, MENAFN, Argus)
The deal follows a series of contracts finalized last month for two Chinese companies, PowerChina and Sinotech, to build 1,000 schools across Iraq. No value was given for the deals, but in 2019 China agreed to undertake a wide range of construction projects in Iraq in exchange for 100,000 barrels of oil. (Global Constuction Review)
Earlier last year, China reached deals to build an airport in Nasiriyah, some 1,000 healthcare facilities across the country, a sewage treatment plant in Baghdad, and nearly 90,000 new homes in the Baghdad district of Sadr City—all in return for oil. (GCR)
Last January, Iraq won an up-front $2 billion infusion from state-owned ZhenHua Oil Co, subsidiary of the China North Industries Group Corp (Norinco). The deal marked the first in which Iraq was offered pre-payment for crude, with oil effectively used as security for a loan.