Contractors are becoming increasingly optimistic that Iraq’s long-delayed $13bn Common Seawater Supply Project (CSSP) will see significant progress over 2016.

The boost in sentiment comes after China Petroleum Pipeline (CPP), a subsidiary of state-controlled China National Petroleum Corporation (CNPC), signed a deal agreeing to form a consortium with other investors to invest in the scheme.

The deal has prompted some industry figures to forecast that engineering, procurement, and construction (EPC) contracts will be tendered before the end of the year.

“Now that the funding agreement is in place and the design work is in its final stages, we should see the main contract tendered at some point in 2016,” says one industry source.

Other sources connected to Iraq’s oil and gas projects market remain cautious, but say the outlook for the project has improved.

“The deal with CPP is certainly a good sign,” says one source connected to a large EPC contractor active in Iraq. “However, the project is likely to remain challenged. It struggled to see progress when oil prices were above $100 a barrel. Now that the oil price is low, it is going to be much harder to push it forward.”

The CSSP aims to replace existing use of fresh river water at Iraq’s southern oil fields with seawater pumped through a network of pipelines.

Austria-based engineering consultancy ILF is handling the front-end engineering and design (feed) study for the pipelines, with US-based Parsons carrying out the feed for the pumping facilities.