Daewoo approved for $559m Iraq oil facility

16 April 2014

South Korea’s Daewoo Engineering & Construction to build the final degassing station at Zubair field

Iraq’s cabinet has approved a $558.8m engineering, procurement and construction (EPC) deal with South Korea’s Daewoo Engineering & Construction to build a degassing station at the Zubair oil field.

The deal, approved in the weekly cabinet meeting on 15 April, is the last of three degassing stations deals at the Zubair field, which is operated by Italy’s Eni.

The two other deals, with Samsung Engineering for $840m and Hyundai Engineering & Construction for $818.2m were approved in late-February. This came after proposals were originally submitted in February 2013 by six companies and once again in May 2013.

Earlier in April, Eni awarded a $551.4m contract to France’s Alstom for the construction of a 740MW gas-fired captive power plant, which will support production at the Zubair field.

The Hyundai and Daewoo deals still need to be formally signed, but if counted with the Alstom deal, the $6bn Karbala refinery awarded in January, and the Samsung degassing station, then the Oil Ministry’s major contract awards so far in 2014 amount to $8.77bn. In 2013, Iraq managed to award only $4.1bn.

However, a quick move to formal contract signings are unlikely with parliamentary elections set to be held on 30 April, followed by a long government formation process. 

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