Iraqi Kurdistan opens new oil refinery

ARBIL, Iraq Sat Jul 18, 2009 3:31pm EDT

1 of 3. U.S. Ambassador to Iraq Zalmay Khalilzad (L) and Iraqi Kurdistan Prime Minister Nechirvan Barzani (R) put the last touches at Khurmala oilfield in Arbil, 310 km (190 miles) north of Baghdad July 18, 2009.

Credit: Reuters/Azad Lashkari

ARBIL, Iraq (Reuters) - Iraq's largely autonomous Kurdistan region opened a new oil refinery on Saturday, with a projected capacity of 40,000 barrels per day (bpd), the director of the group that built the refinery said.

The refinery near the Kurdish capital Arbil is run by private Kurdish group Kar, which will process crude from the Khurmala Dome oilfield, its director Baz Karim told Reuters.

"The (Kurdistan Regional Government) will pay us for what the refinery produces. Our capacity is now 20,000 bpd but it will be 40,000 bpd by the end of the year," Karim said.

As well as producing gasoline for cars, the refinery will make kerosene, heavy fuel oil, diesel, paraffin and airplane fuel, Karim said.

The northern Kurdistan region, hoping to quickly develop its oil and gas sector, is entrenched in a long-running feud with the central government in Baghdad over energy contracts Kurds have signed unilaterally with foreign firms and which Baghdad deems illegal.

Last November, Oil Minister Hussain al-Shahristani said that development of Khurmala to supply refining in Kurdistan was a priority. The Oil Ministry was not immediately available for comment on the Arbil refinery opening.

(Reporting by Shamal Aqrawi; Writing by Tim Cocks; Editing by Victoria Main)

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