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Iraq's largest refinery faces outages from water shortage

London — Iraq's largest oil refinery faces further shutdowns due to a water crisis, which has already closed the plant earlier this month, according to the operator.

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The 210,000 b/d Shuaiba refinery near Basra was forced to shut down between July 5 and July 7 due to salt levels more than four times the norm in the river water used in the refining process.

"There are fears that the stoppage might re-occur after the re-operation because the problem might remain," said Haitham al-Ajwadi, media director of the South Refineries Company, in a statement.

Iraq's refinery capacity is limited, with aging plants struggling to keep up with demand especially in the summer. Federal Iraq in April averaged 588,000 b/d of refinery throughput, and the semi-autonomous Kurdistan region's refineries averaged around 150,000 b/d.

Iraq could overcome occasional and limited outages by releasing fuel from storage, but doesn't have the storage or spare capacity to cover more without reducing domestic supply, or increasing imports.

In April, Iraq imported an average of 23,000 b/d of diesel, 50,000 b/d of gasoline, and small quantities of kerosene.

For now, Iraq's oil fields are not being affected, due to their own stop-gap measures locating and treating alternative water supplies under longstanding agreements not to use fresh river water for field development. This preceded the current water shortage.

--Staff, newsdesk@spglobal.com; Newsdesk-Iraq, newsdesk@spglobal.com

--Edited by Jonathan Dart, newsdesk@spglobal.com