The contract award for the water treatment plant package that forms part of Iraq’s Common Seawater Supply Project (CSSP) is likely to be delayed by political instability, according to industry sources.

A new government is yet to be announced in Iraq, despite it being nearly three months since Iraqis went to the polls to vote in a parliamentary election.

Additionally, protests have swept across the south of the country over recent weeks.

“The state-owned energy institutions aren’t in a strong position to make serious decisions on megaprojects at the moment,” said one source. “It is very unlikely that we will see quick decision making when it comes to awarding contracts for the CSSP.”

Three companies have submitted bids for the water treatment plant package that forms part of Iraq’s Common Seawater Supply Project (CSSP). They are:

• Petrofac (UK)
• Biwater (UK)
• Hyundai E&C (South Korea).

All three of the companies have offered to provide financing as part of their contract with Basra Oil Company (BOC), which has made it possible to proceed with the project without the participation of US oil major Exxon Mobil.

A large pipeline package, which also forms a key part of the CSSP, is yet to be tendered.

In June, Ihsan Ismaael, the director general of BOC, said Exxon Mobil is no longer in talks with Iraq over the CSSP. Exxon had been in discussion with Iraq over partnering on the project for more than two years.

In October 2017, it was reported that the two parties were close to a final agreement on the project, but talks broke down in April.

State-owned BOC is the project client and US-based CH2M is project management consultant (PMC) on the CSSP.

The project will provide the operators with water to inject into oil reservoirs to increase pressure and boost recovery. It will also free up fresh water for use by the local population.

Under the original plans, the CSSP was due to have a budget of $13bn and the capacity to deliver 12.5 million barrels a day (b/d) of seawater through 426 kilometres of pipeline, including eight interconnecting stations and 10 delivery stations.

Since then, the scale of the project has been significantly scaled back. It is now expected that the water project will have an initial capacity of 5 million b/d.

The CSSP has suffered several setbacks since it was first conceived. Originally led by Exxon Mobil, responsibility for the project was transferred to CH2M in a $170m deal in late 2012.

A front-end engineering and design (feed) study on the pipelines to transport the seawater to oil fields was carried out by Austria’s ILF Consulting Engineers. Separate feed studies were completed in 2016 by US-based Parsons.

These concerned water intake and outfall structures, a shipping channel, offloading facility, seawater treatment facility and a gas turbine power plant.