Changes to the Oil Ministry rules on bid submissions have added to delays on Iraq’s plans to launch an estimated $10bn scheme to build a giant seawater processing facility for reinjection into its southern oil fields.

The project is essential to boost production at the country’s oil fields.

The planned Common Seawater Supply Facility (CSSF), led by the US’ ExxonMobil is intended to process 2.5 million barrels a day (b/d) of treated seawater from the Gulf, with expansion up to 12 million b/d to be injected in fields awarded in Iraq’s first and second oil licensing rounds.

ExxonMobil completed its first technical study in September 2010 and the scheme was approved by the Iraqi Cabinet on 22 September. Two Front-end engineering and design (Feed) and pre-Feed deals were awarded in 2010.

US engineering firm Fluor won a deal covering the main utilities package, including water intake and pumping stations at an as yet undetermined location in Basra. The UK’s Mott MacDonald won the deal for the water pipelines from the facility. Theoretical and conceptual studies were carried out by Mott MacDonald, which began work from their US office in 2010.

A significant amount of work has been done so far and sources close to the companies now say they are ready to move into the detailed design phase.

“Subcontracts for the ground site surveys were close to being signed a few months ago”, says a Basra-based source.

However, progress on the tender process for the engineering, procurement and construction (EPC) contracts of the scheme has been slow. The Basra-based source described it as “bubbling under away in the background”, while the Oil Ministry changed its rules earlier this year.

“Proposals now have to be resubmitted in a slightly different form with different ministerial departments involved. This is in part to improve the transparency of the system. It could take 8 to 12 weeks for approval and then another five months before bidding”, explains a source close to the project.

 “The CSSF process has been kicked off, but this will have an impact on the project overall. The end date of construction will probably catch up, but the process to get the project started will be severely affected. We are looking at three to five months delays”.

The amount of water coming from the Tigris and Euphrates rivers has fallen to almost one-third of its previous 100 billion cubic feet a day (bcf/d) due to Syrian and Turkish water projects and sparse rainfall. Even without this shortage, the quantities of water required by the oil and gas industry could not be supplied via Iraq’s existing facilities (MEED 18:2:11).

All the fields being developed by international oil companies will at some point require water injection to increase recovery. The amount of water will vary between each field to field, meaning the injection project will have to be flexible enough to meet these changing requirements. Mott MacDonald estimates more than 10 million barrels a day (b/d) of water will need to be injected into the oil fields to maintain production over the next six to 10 years.

Each field will be set on a different timeline and will have different requirements. The demand for water will also increase rapidly from 2012, once the first phase of new projects begin production.

“It will happen. Without these volumes of water it will be impossible to sustain any increases in oil and gas production. It will go out, it has to”, says the Basra source.