Iraq starts work on common seawater supply facility

10 October 2011

First Iraq contract signed and tenders for critical reinjection scheme launched

Exxonmobil has signed the first of a series of deals for work on a stalled scheme to build a giant seawater processing facility for reinjection into Iraq’s southern oil fields.

The US oil major is leading a consortium of international oil companies (IOCs), which signed oilfield licensing agreements with Iraq’s Oil Ministry in 2009 and 2010 to design, build and finance the Common Seawater Supply Facility (CSSF) scheme. Sources close to the company tell MEED it signed a contract with the UK’s Mott Macdonald on 4 October for primary survey work.

Mott Macdonald would not comment on the contract.

Iraq energy awards ($ m)
Q1 20100
Q2 201050
Q3 2010973
Q4 2010150
Q1 20110
Q2 2011280
Q3 20116600
Source: MEED Projects

Work has already begun and is likely to continue until the end of 2011 supplying data for subsequent phases of the scheme. Tenders for early works at the facility near Basra on Iraq’s Gulf coast have already been released. Prequalification documents are due to be submitted by interested firms by the end of October.

Exxonmobil has also asked for prequalification documents for the scheme’s three major packages, according to an engineering contractor in the country. These cover the construction of a 120-kilometre pipeline, pumping stations and sea-water intake for the processing facility. A tender could be released as early as January 2012, says the source.

The estimated $12bn-plus scheme, which is essential to boost production at the country’s oil fields, has suffered a series of delays as the Oil Ministry and IOCs struggle to agree on financing. The plant is intended to process 2.5 million barrels a day (b/d) of treated seawater from the Gulf, with eventual expansion up to 12 million b/d to be injected in fields awarded in Iraq’s first and second oil licensing rounds.

Two front-end engineering and design (feed) and pre-feed deals were awarded in 2010 to the US’ Fluor and Mott MacDonald. However, changes to Oil Ministry tendering and contract rules this year meant work stopped. It is still unclear if these deals will be retendered or if the firms will be re-approved (MEED 28:6:11).

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, meaning the injection project will have to be flexible enough to meet these changing requirements.

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.

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