Chinese state-owned subsidiary wins Iraq pipeline deal

10 September 2012

Russia’s Gazprom awards China Petroleum Pipeline Bureau $190m contract at the Badra oil field

China Petroleum Pipeline Bureau (CPPB), a subsidiary of state-owned China National Petroleum Corporation (CNPC), has been awarded a contract worth about $190m for the construction of a pipeline from the Badra oilfield in the southeast of Iraq.

Russia’s Gazprom, the developer of the Badra field, awarded the contract at the end of August, according to a source close to the project. CPPB beat rival proposals from several companies, when commercial proposals were submitted in April. These included Italy’s Saipem, the UK’ Petrofac, and Dodsal and Punj Lloyd, both of India.

India’s Jindal SAW will supply the materials for the 24-inch, 165-kilometre-long crude oil export pipeline, which will run from Badra to the Gharraf field.

A second scheme, worth about $130m, covers the construction of infield oil, gas and water pipelines connecting wellheads, central processing and storage facilities by the end of 2015. However, it is unclear if CPPB has also been awarded the second contract.

The company is also the frontrunner for another pipeline construction deal, this time at the Gharraf field, which is being developed by Malaysia’s Petronas. CPPB submitted a price of $65m in July for a 28-inch, 92km pipeline from Gharraf to the Nassiriya storage depot.

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