Iraq is making significant strides in its energy sector, particularly with a notable oil refinery expansion project aimed at reducing dependency on imported fuels. This vital endeavor underscores Iraq’s commitment to maximizing the value of its crude oil resources while enhancing domestic production capabilities.
Expansion of the Diwaniyah Refinery
The Al-Barham Group (ABG) is spearheading an ambitious $800 million expansion of the Diwaniyah refinery. This project is part of a larger initiative focused on enhancing the efficiency and output of various refineries across the country, including those in al-Amarah, Muthanna, Kirkuk, and Qayyarah. The Iraqi government views these expansions as critical to achieving energy independence and boosting economic growth.
According to projections made by the refinery’s management, the Diwaniyah facility expects to generate approximately $35 million in monthly revenues by September 2025, after the completion of the expansion. As part of this effort, the refinery will see a significant increase in its production capacity, from its current capabilities to a remarkable total of 90,000 barrels per day. This increase is driven by the installation of an atmospheric distillation unit capable of handling 70,000 barrels per day, as highlighted by the British publication Middle East Economic Digest (MEED).
Project Timeline and Scope
The expansion project gained momentum after the Iraqi government finalized the deal in February 2025. Following the signing, the Prime Minister’s Office (PMO) announced that construction efforts would begin shortly, with equipment delivery anticipated soon after securing the necessary financing. By July 2025, work officially commenced, and the Ministry of Oil set an ambitious five-year timeline for the project’s completion.
Beyond the installation of the primary distillation unit, the expansion is set to include a comprehensive array of facilities designed to enhance overall operational capacity. These include a liquefied petroleum gas (LPG) processing unit with a capacity of 180 tons per day, a naphtha hydro-treating unit at 18,000 barrels per day, a gasoline upgrading unit at 10,000 barrels per day, and a naphtha isomerization unit with a capacity of 8,000 barrels per day. Ensuring that the refinery can handle increased production effectively, the project will also feature a loading terminal designed to accommodate up to 90,000 barrels per day.
Additional Infrastructure Developments
Further enhancing the refinery’s operational capabilities, the project will include a power generation facility, a nitrogen plant, a water pumping and purification station, an industrial wastewater treatment plant, and a total of 24 storage tanks dedicated to crude oil and petroleum products. These additions aim to promote sustainable operations, ensuring that the refinery not only meets current energy demands but also adheres to environmental standards.
Upon completion, the Diwaniyah refinery will provide a diverse range of high-quality products, including gasoline, naphtha, kerosene, red diesel, fuel oil, and LPG. This expansion aligns with Iraq’s broader objective of achieving self-sufficiency in petroleum products, ultimately supporting the nation’s economic stability and future growth potential. The progress of the Diwaniyah refinery expansion is a testament to Iraq’s commitment to strengthening its energy sector and reducing its reliance on external fuel resources.