March 30th, 2012

Al-Fao’s New Facelift



Basrah- State Co for Oil Projects (SCOP) is forging ahead with the reconstruction of the Al-Fao crude oil tank farm to bring it back to its old glory of the 1970’s. It was in 1976, just as Iraq nationalized its oil industry, that construction of the 16-tank complex was completed in order to cater for the big increase in oil production and export capacity that Iraq seemed destined for at the time. By 1979, Iraq was producing some 3.5 million b/d and had a production capacity close to 3.8 million b/d. However, destiny changed and once the Iraq-Iran war got underway in 1980, the newly built Al-Fao tank farm was bombed and destroyed together with the Khor al-Amaya terminal in an 8-year war that set the two countries’ oil sectors backwards for years to come.

It wasn’t until the year 2000 that work was launched again to rehabilitate the area, remove what was now just scrap metal, in order to rebuild new storage tanks but it was only in 2010 that the first contracts for rebuilding the tank farm were awarded. Once long term service contracts were signed with international oil companies to rehabilitate the producing oil fields and develop new ones, the storage capacity had to be expanded significantly to cater for the new crude coming on stream.

Today, the huge yard looks set to become what it was meant to be four decades ago. The first 16 tanks, of 58,000 m3 each, are lined up with eight of them ready to be filled once the final stages of piping, testing and painting are completed over the next few months.

These will be followed by the second set of eight tanks next year which together will almost double the current 5.5 million barrels crude storage capacity of the southern fields, absorbing the influx from the fields and adding flexibility to dealing with interruptions at export terminals in the Mideast Gulf. The third set of eight tanks is also on paper awaiting the first ground work.

However, with current plans to double Iraq’s production capacity this decade and possibly triple it after that, the long term plans could turn Al-Fao complex at the southern tip of the country, which also includes the onshore facilities for the offshore export terminals, into Iraq’s most modern and most vital complex.

The View from Baghdad