By: AGBI

A major refinery project in southern Iraq is moving towards completion after Japanese engineering company JGC agreed to return to the site following a suspension caused by the Iran war.

JGC evacuated its personnel from the site in the southern oil hub of Basra following the start of the conflict on February 28, halting the final stage of construction.

An agreement “was signed with JGC to officially resume construction and operational work on the massive fluid catalytic cracking (FCC) complex at the South Refineries Company (SRC) in Basra,” the Iraqi oil ministry said in a statement.

The project, which is nearly completed, will produce around 5 million litres per day of gasoline and 7 million litres per day of diesel.

Oil ministry officials said in late 2025 that the project aims to slash Iraq’s fuel import bill and convert heavy refining residues into high-value petroleum products.

Iraq awarded the contract to JGC and its partner, South Korea’s Hyundai, in 2012 as part of a $4.8 billion Japanese loan for the rehabilitation and upgrading of the Basra refinery, according to the ministry.

Iraq has embarked on a post-war reconstruction programme with an emphasis on its hydrocarbon sector.

Refinery development and rehabilitation projects boosted the country’s refining output capacity from around 820,000 barrels per day at the end of 2020 to nearly 1.4 million bpd at the end of 2025, according to the Kuwait-based Organization of Arab Petroleum Exporting Countries.