The UK’s Petrofac is the frontrunner for a major pipeline construction deal in the Kurdistan region of northern Iraq after submitting a low bid of about $289m.

The UK/Turkish joint venture Genel Energy plans to build a 24-inch, 255 kilometre crude oil export pipeline, which will run from the Taq Taq field to the Feysh Khabor metering and pumping station near the Iraqi border with Turkey, connecting it with the northern Iraq export pipeline.

Seven firms bid on 14 February for the engineering, procurement and construction (EPC) contract and it was expected to be awarded before June.

The bidders include:

• Arge (Turkey)
• Calik Enerji (Turkey)
• Consolidated Contractors Company (Athens-based)
• Gama (Turkey)
• Petrofac
• Sinopec (China)
• Tekfen (Turkey)

Feed work was completed by Australia’s OSD Pipelines in the third quarter of 2011. The 420,000 b/d pipeline is planned to be commissioned and operational by the end of 2013. 

However, sources close to the project tell MEED that Genel Energy could retender the pipeline with a changed scope, or cancelled entirely in the wake of new plans from the Kurdistan Regional Government (KRG) in Erbil.

In early June, the KRG announced plans for new export pipelines linking the Kurdish Region with Turkey, which would bypass the control of the Oil Ministry in Baghdad. This would involve the construction of a separate pipeline to the existing Iraq-Turkey pipeline, rather than building new transit routes to Faysh Khabour.

The KRG’s first export pipeline would transport 1 million b/d and is planned for completion by January 2014. The Turkish company Calik Energy is reported to have applied for a permit to build a pipeline from Iraq to Ceyhan, but it is not clear if this is for the same pipeline.

The plans would make the current pipeline redundant. Baghdad and Erbil have been locked in a dispute over the right of control over exports from the semi-autonomous region. All Kurdish exports flow through the Iraq-Turkey pipeline and are sold by State Oil Marketing Organization (Somo), a subsidiary of the Oil Ministry. In April, the KRG stopped all exports to the pipeline.

The UK’s Gulf Keystone, another operator in the Kurdish region tendered a pipeline construction deal on 6 June, which will connect the Shaikan field to Faysh Khabour.