Seven firms bid for $2bn Iraq tank farm deal

01 September 2013

Contractors awaiting commercial deadline for Nasiriya and Bin Umar tank farm construction

Iraq’s State Company for Oil Projects (Scop), a subsidiary of the Oil Ministry has set a commercial deadline of 15 September for a major deal to build crude oil storage tank farms in the south of the country.

Scop received technical proposals from seven international engineering, procurement and construction (EPC) firms at the end of July, according to sources close to the project.

Since then, Scop has held a number of technical clarification meetings with the bidding firms. These include:

The Oil Ministry plans to build 29 new crude oil storage tanks measuring 91 metres in diameter and 14m in height, with a capacity of more than 65,000 cubic metres each. Twenty-two of these will be built at Bin Umar, and another seven near the Nasiriya oil field. The Nasiriya tank farm may be expanded in the future, adding another ten tanks of the same capacity.

Initially thought to be worth less than $200m, contractors now say the storage tank contract could be valued at as much as $2bn.

The two new tank farms will allow Iraq to separate crude oil produced at various fields according to their grade. For example, crude from the Al-Ahdab oil field will be stored in two 66,000-cubic metre heavy oil tanks, while light oil from the Badra and Gharraf oil fields will be stored in another two tanks.

The Oil Ministry plans to increase its crude oil storage capacity from the current level of 30 million cubic metres to 43.2 million cubic metres through the expansion of its five existing facilities in the south of Iraq. This will be further increased to 60 million cubic metres following the construction of five new storage facilities across the country by the end of 2014.

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