Austria’s OMV has set contractors a deadline of 19 January to bid for the contract to build a $60m-plus oil pipeline in Yemen.

The company is asking international engineering firms to submit both commercial and technical proposals by the deadline.

The proposed 120-kilometre-long pipeline will run from the Habban oil field in central west Yemen to export facilities in the south of the country.

The scheme is part of OMV’s wider plans to boost production at Habban from about 11,000 barrels a day (b/d) to 32,000 b/d by the end of 2010.

The company is also developing new processing facilities at the field.

Engineering executives say that the pipeline will cost about $60m, although they may charge more because of Yemen’s poor security, the remoteness of the area, and the lack of surrounding infrastructure, such as electricity or serviceable roads.

Yemen’s government is facing a war with rebelling Houthi tribesmen in the north of the country and a growing secessionist movement in the south, while suffering a major cash crisis as the flow of petrodollars, which have long underpinned the country’s economy, dries up.

Yemen produced about 305,000 b/d in 2008. The government expects production to fall below 300,000 b/d by the end of 2009. Yemen is also suffering from the fall in oil prices since their peak in July 2008 of $147 a barrel.