Al-Qaeda Insurgents Surround Iraq’s Largest Refinery

– Al Qaeda Insurgents Surround Iraq’s Largest Refinery (RT, June 12, 2014):

While there had been sporadic reports over the past few days that Al Qaeda’s ISIS spinoff had surrounded or even taken control of Iraq’s largest refinery in Baiji, the government was quick to deny such rumors. As was reported earlier, the Baiji refinery remained under government control on Thursday after Sunni rebels’ offensive through northern Iraq, Iraqi Oil Minister Abdul Kareem Luaibi said. Luaibi said Iraq was not importing any additional fuel and that stored supplies of gasoline and diesel were good.

Militants from an al Qaeda splinter group, who seized Iraq’s second biggest city of Mosul this week, advanced into the oil refinery town of Baiji on Wednesday, setting the court house and police station on fire.

“Baiji refinery is totally secured by the special forces and operating normally now,” an official at the refinery said on Thursday.

It may be time to hit F5, because a few short hours later, and moments ago, Reuters reported that the Baiji refinery appears set to fall in Al Qaeda’s hands.

Insurgents surrounded Iraq’s largest refinery in the northern town of Baiji on Thursday, police and an engineer inside said.

Sunni militants first moved into Baiji late on Tuesday, closing in on the refinery, but later withdrew to the surrounding villages after reaching a deal with local tribal chiefs.

A witness who lives in a house near the refinery said the militants arrived in more than 50 vehicles.

Here is a quick snapshot of the refinery’s capacity:

North Refineries Co. of Iraq named Honeywell the main engineering, procurement, and construction contractor for an upgrade of automation systems at its 310,000-b/d hydroskimming and hydrocracking refinery in Baiji. Honeywell will fully automate the refinery, replacing a 30-year-old single-loop instrument control system. The contractor said the project, in addition to improving productivity, will offer “full scalability to support future technology upgrades.”

Built in 1982, the Baiji refinery has these processing capacities: catalytic reforming 46,000 b/d, catalytic hydrocracking 38,000 b/d, and catalytic hydrotreating 182,000 b/d. It has design capacity to produce 64 MMcfd of hydrogen, 5,000 b/d of lube oils, and 26,000 b/d of asphalt.

Photos from the ground:

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So with the Al Qaeda spin off, now armed with the latest US weapons and with nearly half a billion in petty cash courtesy of yesterday’s Mosul raid, the insurgents are about to have direct control over several hundred thousands b/d of energy output.

All they need is a central bank. We are confident Goldman can spare a partner to run it.