Italy’s SICIM is the only contractor that has prequalified for the pipeline package of Iraq’s Common Seawater Supply Project (CSSP), according to industry sources.

“It has not been possible to successfully prequalify many companies due to the significant financing requirements,” said one source. “Very few contractors have...sufficient commercial capacity to take this on.”

The package is estimated to be worth $1.5bn, which will have to be provided by the contractor and its financial partners.

The contract is expected to be either tendered using the build own operate transfer (BOOT) model or using the engineering, procurement, construction and financing (EPC+F) model.

“The exact model that the contract will use is still being decided,” confirmed one source.

Three companies had been shortlisted for the water treatment package of the project.

All have offered to provide financing as part of their contract with Basra Oil Company (BOC).

This has made it possible to proceed with the project without the participation of US oil major Exxon Mobil, according to industry sources.

In June, Ihsan Ismaael, the director general of BOC, said Exxon Mobil is no longer in talks with Iraq over the CSSP.

Exxon Mobil 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 operators with water to inject into oil reservoirs to increase pressure and boost recovery. It will also free up freshwater for 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 only 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.