EXCLUSIVE: Three contractors compete for Iraqi gas plant contract

19 August 2019
Contract for Majnoon sour gas treatment facility expected to be awarded before 2020

At least three international contractors are competing for the engineering, procurement and construction (EPC) contract for the planned sour gas treatment facility at Iraq’s Majnoon oil field, according to industry sources.

China Petroleum Engineering & Construction Corporation (CPECC), UK-based Petrofac and South Korea’s Hyundai Engineering & Construction (HDEC) have all submitted bids for the project, which is estimated to be worth about $250m.

“Contractors are expecting the contract to be awarded before the end of the year,” said one source. “There is a lot of uncertainty around this project so the timing is difficult to estimate.”

The EPC contract for the sour gas treatment facility is part of phase 2 of Iraq’s Majnoon oil field development megaproject. The client on the project is Basra Oil Company (BOC).

The scope for the sour gas treatment facility package includes:

  • Construction of 160 million cubic-feet-a-day gas treatment facility
  • Construction of gas handling facility
  • Construction of gas sweetening facility
  • Construction of gas dehydration facility
  • Construction of gas storage tanks facility
  • Construction of associated facilities

US-based KBR carried out the front-end engineering design (feed) work for the project.

In January, BOC announced a deal with state-run Iraq Drilling Company to drill 40 new oil wells in the Majnoon oil field.

It said the deal would help boost output from Majnoon to 450,000 barrels a day (b/d) in 2021.

Majnoon was producing about 240,000 b/d at the beginning of 2019.

The 40 wells in the deal with Iraq Drilling Company were in addition to another 40 that Iraq and US-based Schlumberger have agreed to drill.

The deal with Schlumberger was announced in December 2018.

The UK/Dutch Shell Group exited Majnoon last year, handing operations to BOC.

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