Russia’s Lukoil, the developer of the West Qurna Phase-2 oil field in the south of Iraq, has awarded Turkey’s Enka an estimated $204m contract to build a captive power plant at the field.

The Turkish firm submitted the lowest bid for the deal to build a 126MW power plant using turbines supplied by the US’ GE, according to a source close to the project.

Lukoil’s major EPC projects in Iraq
Project Estimated value ($m)
Power plant 204
Early production facitlity  1,000
Pipeline 200
Tank farm 250
EPC=Engineering, procurement and construction. Source: MEED

The deal is the second of four contracts to be awarded as part of Lukoil’s development of the 12.9-billion-barrel field, which will also include an oil production facility, pipelines and storage.

At the end of January, Iraq’s cabinet approved a $1bn engineering, procurement and construction (EPC) contract with Samsung Engineering of South Korea for early production facilities (EPF) at West Qurna-2, almost 11 months after bids were first submitted.

Samsung beat rival proposals from four other firms: Russia’s Globalstroy Engineering, Italy’s Saipem, Punj Lloyd of India and Canada’s SNC Lavalin.

The contract signing is imminent, perhaps before the end of March, but some sources in Iraq have suggested the contract value has been increased to as much as $1.3bn, although they cite no reason for such an increase.

“[Lukoil, Samsung and the Oil Ministry] have set a date of 22 March for the signing ceremony,” says a source close to Samsung. adding that while there could be price fluctuations during client clarification meetings before the ceremony, the price would not increase significantly.

Lukoil and Norway’s Statoil were awarded the development contract for the West Qurna-2 field in Iraq’s second oil and gas licensing round in 2010. The partners plan to begin production in 2013 at 150,000 barrels a day (b/d), rising to 400,000 b/d by 2014. Lukoil plans to spend up to $2bn in 2012, after only spending $200m the previous year.