South Korean firms close on Iraq degassing station deal

15 September 2013

Contract talks to close before the end of September

Three South Korean firms are in the closing stages of talks with the Oil Ministry and Italian oil firm, Eni for an estimated $3bn deal to build new de-gassing stations in the south of Iraq.

Oil Minister Abdulkarim al-Luaibi confirmed that his office was “in the last stages in attributing the project entirely to three Korean companies”, according to Bloomberg news agency.

Al-Luaibi added that the contracts would be “be completed in less than two weeks”, so the deal could be awarded before the end of September.

MEED reported on 10 September that Daewoo Engineering & Construction, Hyundai Engineering & Construction and Samsung Engineering were set to win the deal, which covers the construction of five new greenfield degassing stations. The proposals were originally submitted in February by six companies and once again in May.

Samsung Engineering is understood to be in line for largest package, estimated to be worth as much as $1bn, for degassing stations in the north of the field.

Hyundai Engineering & Construction’s package in the central area of the field is slightly smaller, while Daewoo’s southern stations are considered to be worth about $700m.

Eni and its partners, the US’ Occidental Petroleum, South Korea’s Korea Gas Corporation and state-owned Missan Oil Company, reached an agreement with the Oil Ministry at the end of May to cut its final production target by almost a third, to 850,000 barrels a day (b/d) from 1.25 million b/d.

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