Chinese firm tenders Iraq pipeline supply deal

24 July 2012

China National Offshore Oil Company developing Missan oil field complex

China National Offshore Oil Company (CNOOC), the developer the of the Missan oil field complex in the east of Iraq has released a tender for the supply a crude oil export pipeline.

CNOOC plans to build a 42-inch pipeline from the Burzugan oil field, one of three fields in the Missan complex, to storage facilities at the Al-Fao peninsula in the south of Iraq.

Known as the Missan Crude Oil Pipeline, it will also transport crude from the Halfaya oil field, which is being developed by PetroChina, another state-owned Chinese firm.

The tender covers the supply of various lengths of pipeline, which range in diameter from 32-56 inches to be delivered to the port of Umm Qasr in the south of Iraq. The pipeline also includes at least 15 block valve stations.

Bids for supply are due expected to be issued on 27 July. A tender for the installation of the pipeline is expected to be issued within six months. The total cost of the project is estimated at around $400m.

The Missan complex contains three major oil fields; Buzurgan, Abu Ghraib and Fakka, all along the Iranian border in southeastern Iraq. CNOOC leads a consortium along with Turkish Petroleum Overseas Company (TPAO) and state-owned Iraqi Drilling Company, which agreed in 2010 to increase production to 450,000 barrels a day (b/d) by 2017. Production currently stands at around 95,000 b/d.

There is currently a 28-inch, 261-kilometre-long pipeline running from Buzurgan to Al-Fao. The line splits at Hamdan at the Hamdan Junction, with one spur heading to Al-Fao and the other to the Zubair tank farm. Although designed with a capacity of 300,000 b/d, the pipeline currently operates at less than 100,000 b/d. The 19km Hamdan Junction-Zubair 1 tank farm section comprises three pipelines, one of which is closed.

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