Lukoil sets June deadline for West Qurna-2 deal

24 February 2014

Water injection and oil gathering systems planned for Iraqi oil field

Russia’s Lukoil has set a 5 June deadline for commercial proposals for a major upstream engineering, procurement and construction (EPC) project at the West Qurna-2 oil field in Iraq.

Technical bids for the estimated $1bn-plus water injection and oil gathering systems deal are due to be submitted on 10 April, according to sources close to the scheme.

The Russian energy firm has set a bid bond of $1m, to be submitted along with the technical bids, valid for 250 days. Technical evaluation is expected to last for a month until 10 May, before priced bids on 5 June. Lukoil hopes to award the contract before October.

According to tender documents seen by MEED, the project covers the detailed design of three phases of the water injection system, along with the procurement, construction and commissioning of phases 1 and 2. Phase 1 covers the field’s water requirements up to the end of 2015, while phase 2 covers up to 2019 and phase 3 will cater for all water consumption up to 2034.

The scheme also covers the EPC of 13 well pads around a central processing facility (CPF), a 132KV overhead power line and pipelines between the well pads and the CPF. These range from 16 to 20 inches.  

Lukoil has divided the development of the West Qurna-2 field into three phases. The first aims to produce 150,000 barrels a day (b/d) from three crude trains. Phase 2 will increase production capacity to 400,000 b/d, with eight oil trains in operation and one train as a spare. The final phase will see production capacity raised to 550,000 b/d, with ten trains in operation and one spare.

In January, Lukoil signed an amended agreement with the Iraqi 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. Production is expected to start in March or April at about 120,000 b/d, rising to 400,000 b/d by the end of the year.

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