South Korean firm awaiting approval from Iraqi cabinet for $800m deal
South Koreas Daewoo Engineering has been given initial approval for a major engineering, procurement and construction (EPC) deal at the Akkas field in the Anbar province of western Iraq, estimated at a little under $800m.
The deal to build gas processing facilities at the field is now awaiting final approval from the prime ministers office and the Iraqi cabinet, according to sources close to the project.
Bids were submitted in April and Daewoo was notified of its status as the preferred bidder at the end of June by the fields developer, Kogas Akkas. A contract could be awarded by the end of July, which would represent a relatively quick turnaround, when compared to other Iraqi oil and gas projects.
The process has been much quicker than projects at other fields in Iraq. Kogas has been pushing hard as they want to meet their commitments, says the source.
The evaluation process was also helped by the fact that only four firms bid for the deal; GS Engineering & Construction; Daewoo Engineering; Samsung Engineering; and STX Industries, all of South Korea.
This is in large part due to its precarious security situation in the Anbar province, which has been the scene of ongoing anti-government protests and militant attacks. This was highlighted in early April when gunmen killed a number of workers at the field and kidnapped two others.
If approved, Daewoo will build a 400 million cubic feet a day (cf/d) gas processing plant and associated pipelines.
The 5.6-trillion-cubic-feet Akkas gas field was awarded in Iraqs third oil and gas licensing round in 2011 to Kogas Akkas, a joint venture of South Korea Gas Company (Kogas), which holds a 75 per cent stake and state-owned North Oil Company.
The pair hope to reach first commercial production of 100 million cf/d by September 2015 and then ramp up to 400 million cd/d by 2017.
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