Lukoil assessing bids for West-Qurna-2 expansion

09 March 2015

No awards on Iraq oil field expansion a year after tender

  • Russian group floated several tenders on project in 2014
  • Chinese, Egyptian and South Korean bidders for processing facility
  • Project to expand capacity to 550,000 barrels a day

Lukoil is still assessing bids on the expansion of central processing facilities (CPF) at its West Qurna-2 oil field in southern Iraq, according to sources familiar with the project.

The Russian oil group floated an engineering, procurement and construction (EPC) tender for the CPF expansion, along with a separate tender for the water injection and oil gathering system, in February 2014.

The packages are part of the second-phase expansion of the West Qurna-2 field to increase crude production capacity to 550,000 barrels a day (b/d).

Companies bidding for the CPF tender are thought to include China Huanqiu Contracting & Engineering Corporation (CQCEC), China National Petroleum Corporation (CNPC), Egypt-based Engineering for Petroleum and Process Industries (Enppi) and South Korea’s Samsung Engineering.

It is unclear when Lukoil plans to award the main EPC contracts for the second-phase expansion, which also includes a river water intake and water treatment plant, a power plant and pipelines for water, gas and liquefied petroleum gas (LPG).

The first phase of the project, named Early Oil, was commissioned in 2014 and will boost capacity to a planned 400,000 b/d. Lukoil reported in late July 2014 that it was producing 280,000 b/d.

The second phase, also known as the Mishrif full field development, will increase production by 150,000 b/d to 550,000 b/d. Lukoil has hired Australia’s WorleyParsonsas the project management consultant (PMC) for the expansion.

In January 2014, Lukoil signed an amended agreement with the Oil Ministry to reduce its plateau oil production target to 1.2 million b/d, from the original 1.8 million b/d signed in 2010.

West Qurna-2 is operated by state-owned South Oil Company and a consortium of contractors including Lukoil (75 per cent) and state-run North Oil Company (25 per cent).

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