Italy’s Saipem frontrunner for second pipeline deal
Iraq’s state-owned South Oil Company (SOC) has opened bids for the third and final phase of the Iraq Crude Oil Export Expansion Project (ICOEEP), which will lift capacity to 4.5 million barrels a day (b/d) from the current 1.8 million b/d.
Engineering, procurement and construction (EPC) bids from four international engineering groups for the estimated $550m deal were opened on 6 June, according to sources close to the project. The bidders are:
- Leighton Offshore (Australia) with Lamprell (UAE)
- Punj Lloyd (India) with Swiber (Singapore)
- Marubeni (Japan), with Van Oord (Netherlands) and McDermott (US)
- Boskalis (Netherlands)
The project will include the installation of a 45-kilometre trunk line and a 10km onshore pipeline, both with a diameter of 48 inches connecting inland oil storage and offshore shipping terminals. It will also include the installation of a single-point mooring stations (SPM) and pipeline-end manifold supplied by the Netherlands’ SBM Offshore.
Known as Japanese Sealines, the scheme will be financed by the Japan International Cooperation Agency (JICA) as part of the Tokyo’s commitment of up to $5bn of assistance for reconstruction in Iraq made at the Madrid Donor Conference in 2003.
EPC bids for the second phase of the expansion were opened on 18 April and the deal looks set to be awarded to Italy’s Saipem, according to the source. The project is scheduled for completion between 2013 and 2015.
In September, Iraq awarded a $733m contract to Leighton for the first phase, which includes the installation of two new onshore and offshore pipelines, along with three SPMs, a central manifold and metering platform (MEED 14:7:10).
Exports in April through Iraq’s oil terminals at Basra and Khor Alamya in the Gulf, which form the majority of Iraq’s crude shipments, amounted to 49.7 million barrels. At 1.65 million b/d this is close to full capacity with the Basra subsea pipeline only able to handle 1.8 million b/d.
According to the US’ Special Inspector General for Iraq Reconstruction (SIGIR), the first of the three offshore SPMs, is scheduled for completion before the end of 2011 and should ease the export bottleneck. The two remaining SPMs are scheduled for completion by March 2012.