China Petroleum Pipeline Bureau could be in line for $650m construction deal
State-owned Missan Oil Company (MOC) is studying the route for a new 1 million barrel a day (b/d) crude oil export pipeline from the Missan province to the Al-Fao storage depot in the south of Iraq.
Reuters news agency reports that state-owned China Petroleum Pipeline Bureau is set to be awarded a contract for the pipeline’s construction, although this could not be confirmed.
The 272-kilometre long 42-inch pipeline will run from a meeting point between the Halfaya and Buzurgan oil fields to Al-Fao. The total value of the pipeline, known as the Missan Crude Oil Pipeline, is estimated at $650m. Bids were submitted in mid-October for the construction.
A separate tender was issued in July for the supply of the pipelines. MOC hopes to complete the construction of the pipeline within two years. According to sources close to the project, India’s Jindal SAW and a Chinese firm will supply the pipelines.
The Halfaya field is being developed by Petrochina, a subsidiary of state-owned China National Petroleum Corporation (CNPC) while the development of the Missan fields is being led by another state-owned firm, China National Offshore Oil Company (CNOOC).
According to a statement on the MOC website, it is currently conducting non-technical studies along the proposed pipeline route, identifying areas along the route likely to contain unexploded ordnance from the Iran-Iraq war.
The Missan complex contains three major oil fields; Buzurgan, Abu Ghraib and Fakka, all along the Iranian border in southeastern Iraq. CNOOC leads a consortium along with Turkish Petroleum Overseas Company (TPAO) and state-owned Iraqi Drilling Company, which agreed in 2010 to increase production to 450,000 barrels a day (b/d) by 2017. Production currently stands at around 95,000 b/d.
The project will also include a stretch of 32-inch pipeline running approximately 56-kilometres from Buzurgan, one of three fields in the Missan complex to the meeting point. The pipeline will eventually replace the existing 28-inch, 261-kilometre-long pipeline running from Buzurgan to Al-Fao. which does not have the capacity to handle the planned production increases in the province by 2017. Designed with a capacity of 300,000 b/d, the pipeline currently operates at less than 100,000 b/d.