June 3 (Bloomberg) -- Iraq and Chevron Phillips Chemical Co., a joint venture of Chevron Corp. and ConocoPhillips, signed a letter of intent to evaluate the feasibility of developing a petrochemical plant in the country, officials said.
The company would examine building a new facility and upgrading an existing Iraq-owned petrochemicals factory in southern Basra province, Hanaa al-Husseini, a spokeswoman for the Industry and Minerals Ministry, said today in Baghdad.
Melanie Samuelson, a spokeswoman for Chevron Philips, said in an e-mailed statement that the company, with headquarters in The Woodlands, Texas, wants to assess “the feasibility of developing an integrated petrochemical complex.” Both Chevron Phillips and the ministry declined to give additional details, including cost estimates or dates for the project.
Iraq holds the world’s fifth-largest crude reserves and the fifth-biggest natural-gas deposits in the Middle East, according to data from BP Plc that also include Canadian oil sands. The government, which depends on crude sales for more than 90 percent of its official income, wants to diversify into chemicals production and other industries.
Iraq’s oil output is on the rebound after stagnating for years during the rule of Saddam Hussein, ousted by a U.S.-led invasion in 2003. The nation burns off natural gas produced in association with crude because it lacks the infrastructure to use it as a fuel for electricity plants or feedstock for petrochemicals.
The ministry’s al-Husseini said April 9 that Shell Chemicals Ltd. agreed in a separate arrangement to study the feasibility of a petrochemical plant.
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