Iraq has signed a heads of agreement to build an industrial island in the Persian Gulf which would significantly increase its export and storage capacity.
The agreement with Dutch firm Boskalis will add more than six million barrels per day of storage capacity as well as an extra three million barrels per day to the country's export capacity. Currently, Gulf capacity is 3.6 million barrels per day for exports and 10 million barrels for storage.
According to Platts, the project includes building housing for 300 people on the island. The export terminal would be attached to it and will include four jetties with loading facilities for up to four VLCC vessels. The project also includes the construction of a breakwater berth and the extension of two offshore pipelines. The onshore terminal will be expanded to receive light and heavy oil that could be pumped to the new island for export.
The project is part of a strategy implemented by Iraq's Ministry of Oil to develop the country's national economy and increase financial revenues of the federal treasury.
Ministry spokesman Assem Jihad says: 'The industrial island will give Iraq high flexibility in the process of exporting and loading oil tankers, in addition to raising the storage and export capacity of southern ports.'
Ihsan Abdul Jabbar, director general of the Basra Oil Company, says that the creation of the industrial island will give a 'qualitative leap' and greater flexibility in future export capacities from the south, especially given that production from the company is increasing. 'We are working to keep pace with the expected increase in production and export operations,' he adds.
Boskalis says that within a year the company will prepare a detailed construction study before work starts. It is expected to take two years to complete.