Iraq SOC awards export expansion project management

Christopher E. Smith
OGJ Pipeline Editor

HOUSTON, July 13 -- Iraq’s South Oil Co. July 13 awarded Foster Wheeler a project management consultancy services contract for the Iraq Crude Oil Export Expansion Project onshore in southern Iraq and offshore in Iraqi waters. The project will include construction of a 10-km, 48-in. onshore pipeline; a 60-km, 48-in. offshore pipeline; and installation of valve stations at the Basra and Khor al-Amaya oil terminals.

The project also includes installation of three single-point mooring buoys with a pipeline end manifold near the Basra terminal, a central manifold and metering platform in the Persian Gulf, tie-in branch pipelines, composite cables, and auxiliary facilities. Scheduled for completion by July 2013, SOC expects the project to boost Iraq's Basra export capacity to 4.5 million b/d by 2014 from 1.8 million b/d.

Foster Wheeler will monitor and administer purchase orders and contracts placed by SOC in accordance with recommendations it makes as part of the basic engineering contract. Awards overseen by Foster Wheeler will include critical long-lead equipment items such as valves, line pipe, and the single-point moorings and the offshore and onshore engineering, procurement, and construction contract. Foster Wheeler will also make the award recommendation for the EPC contract for an offshore central manifold and metering platform and associated jacket and will provide subsequent administration and management of this contract.

Exports from Basra dipped briefly Apr. 27 to 960,000 b/d due to low quantities of crude in storage, while exports northward through the Kirkuk-Ceyhan pipeline averaged 300,000 b/d for the bulk of April after saboteurs destroyed part of the 450,000 b/d-capacity northern export pipeline (OGJ Online, May 4, 2010). According to the International Energy Agency, Iraqi exports in May averaged 1.89 million b/d, of which 1.48 million b/d went through Basra and 410,000 b/d went through the Kirkuk-Ceyhan pipeline, which remains subject to intermittent sabotage.

The need to boost export capacity through Basra coincides with Iraqi efforts to boost production in the southern part of the country. BP, with a 38% interest, leads a group with a technical services contract to nearly triple production of the supergiant Rumaila field in southern Iraq to 2.85 million b/d. Its partners are China National Petroleum Corp., 37%, and the Iraqi government through State Oil Marketing Organization, 25%. BP let contracts worth about $500 million to three firms for drilling in April and said it expects 70 wells to be drilled in the field this year (OGJ Online, Apr. 5, 2010).

Eni SPA, Occidental Petroleum Corp., and Korea Gas Corp. agreed to partner with SOC to redevelop the Zubair field near Basra, while ExxonMobil Iraq Ltd. and Royal Dutch Shell PLC signed service contracts for similar work at West Qurna oil field (first phase) and Majnoon oil field respectively, both giants in southern Iraq (OGJ Online, Jan. 27, 2010).

The Basra export expansion project is financed by a loan from the Japan International Cooperation Agency.

SOC operates under the Ministry of Oil of the Republic of Iraq.

Contact Christopher E. Smith at chriss@ogjonline.com.

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