Toyo Engineering prepares major Iraq oil study

17 February 2014

$10bn-worth of rehabilitation work needed to meet country’s capacity expansion ambitions

Japan’s Toyo Engineering Corporation is preparing a study for the estimated $10bn rebuilding of its oil export and transport infrastructure in southern Iraq.

The study will set out recommendations to the Oil Ministry for new pipelines, supervisory control and data acquisition (Scada) systems, storage facilities, and compression and power stations to cope with the country’s planned oil production capacity expansion to 2017.

Conceptual studies were submitted to the ministry and approved in 2013, a source close to the project tells MEED.

However, Toyo has now been asked to carry out more detailed reports before the end of 2014, to allow the ministry to carry out some of the long lead time procurement. The total value of the work required is estimated at more than $10bn.

“Work has started, but Toyo is waiting for a complete scope of works from [Oil Ministry subsidiary] Scop [State Company for Oil Projects],” says the source.

Among the planned projects will be the expansion of the existing export network, with the construction of a pipeline, says the source.

As production increases, so will the volumes of high-sulphur oil and sour gas. A normal pipeline will only last 10 years if used to transport these, so the new pipeline will have to be coated with anti-corrosion materials.

By the end of 2015, Iraq wants to produce 6 million barrels a day (b/d) and 9 million b/d by the end of 2017. This is up from just over 3 million b/d currently. The new infrastructure will have to be developed quickly to keep pace with upstream developments.

To accelerate the study phase, a joint project management team has been proposed, made up of officials from state-owned South Oil Company (SOC), Scop and Toyo. An engineering office in Dubai is also planned to reduce costs and allay security concerns.

SOC signed a general engineering services agreement (GESA) with Toyo in February 2012, covering technical services for upstream schemes at all SOC oil fields and related facilities in the south of Iraq.

A MEED Subscription...

Subscribe or upgrade your current package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications