The UK/Dutch Shell Group plans to tender a major pipeline maintenance deal before the end of the year, which will connect several gas processing facilities in the south of Iraq.
The firm has held several meetings with interested engineering, procurement and construction (EPC) firms from its global prequalified contractor list on how to execute such a tricky project that will involve connecting dozens of brownfield sites.
The deal, which is part of Shell’s South Gas project joint venture, covers inspection, maintenance and repair of more than 150 interconnecting pipelines with diameters of between 18 to 24-inches, according to a source close to the project.
A separate 48-inch, 50-kilometre sour gas pipeline is also planned under the South Gas project, although it is unclear if it will be launched this year. This will run from compressor stations at the Rumaila field to the North Rumaila natural gas liquids (NGL) plant transporting some 50 million cubic feet a day (cf/d).
The South Gas project is being run by Basra Gas Company, a joint venture of state-owned South Gas Company, Shell and Japan’s Mitsubishi Corporation.
It will capture and process 2 billion cf/d of associated natural gas from the Rumaila, West Qurna-1 and Zubair fields. The gas will then be processed to produce sales gas, liquid petroleum gas and condensates. Together, the fields produce about 1.05 billion cf/d of gas, but only 450 million cf/d is used. The remainder is flared.
The technical and logistical challenges of the $17.2bn project are enormous, covering the rehabilitation and rejuvenation of some 30 existing gas collection facilities, compression stations, pipelines and two major gas plants at North Rumaila and Khor al-Zubair at an estimated cost of $12.8bn. In addition, an LPG export terminal will cost a further $4.4bn.
The biggest gains from the project are expected to come through the restart of the sour gas system. This gas, which contains a high proportion of sulphur, is currently flared due to a lack of compression units and because some facilities in North Rumaila are not working.