Lukoil tenders Iraq oil pipeline design deal

17 December 2018
Tender pipelines from the Tuba tank farm are due to travel over 120 kilometres to Iraq’s major oil storage facility on the Al-Fao peninsula.

Russia’s Lukoil has invited international engineering companies to bid for a long-planned deal to design a new crude oil export pipeline in the south of Iraq, which will eventually help it expand oil production in the country.

The tender covers the front-end engineering and design (feed) of pipelines from the Tuba tank farm over 120-kilometres to Iraq’s major oil storage facility on the Al-Fao peninsula, according to the tender documents.

Tender documents are available from Lukoil until 27 December, and feed bids are due to be submitted before 28 January 2019.

Al-Fao is one of the most important facilities in the country, with southern oil output stored and segregated into Iraq’s two export grades, Basrah Light and Basrah Heavy, before being pumped to offshore terminals for loading onto vessels in the Gulf.

Located in the southernmost deserts of Iraq, the facility is a crucial chokepoint for oil exports, and State Company for Oil Projects has been working on the expansion of the massive storage and pumping terminal for nearly 10 years.

The new pipeline did not originally come under Lukoil’s technical service contract for the development of the West Qurna-2 oil field. However, the Russian oil company signed an addendum in 2014, adding the pipeline’s construction to its wider scope of works. Since then, however, the project has suffered numerous delays over cost.

The pipeline will provide a direct connection between Lukoil’s West Qurna-2 field and the export terminals, to help cope with growing oil production.

Commercial oil production at West Qurna-2 started at the field on 29 March 2014 and Lukoil has already succeeded in increasing production to 400,000 barrels a day (b/d). The Ministry of Oil approved the company’s final development plan in April.

According to the plan, Lukoil is expected to reach a plateau of 480,000 b/d in 2020 and 800,000 b/d in 2025, from the field which has recoverable reserves come to about 14 billion barrels. These are found in two main reservoirs — Mishrif and Yamama.

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