Iraq has shortlisted 12 international companies and consortiums
to build the country's first oil export pipeline in decades, and
will ask them to submit their bids by the end of this year for an
$18 billion project that will make the country less dependent on
Persian Gulf export terminals, two oil industry sources said
Wednesday.
Iraq's oil ministry has chosen these companies out of more than
80 international companies which submitted their credentials to
build a section of the 1, 680-kilometer pipeline stretching from
the oil hub of Basra in southern Iraq to Jordanian port of Aqaba in
the Red Sea, the first person said.
The short-listed companies and consortiums are: Lukoil OAO
Holdings, China National Petroleum Corporation, Marubeni
Corporation, Mitsui & Co. Ltd., Toyota Tsusho, Punj Lloyd
(India) and Mass Global International (Iraq), Saipem, Daewoo
International Corporation, Consolidated Contractors Company, or CCC
(Greece), Go Gas, L&T and Fuis Capital Ltd., Petrofac and
Stroygazconsulting, or SGC, and Orascom and Petrojet (Egypt).
SCOP will invite the short-listed companies to receive the
tender package, the second person said. SCOP will also propose that
companies need to submit their offers by November or December, he
added.
Iraq and Jordan signed a preliminary agreement in April to build
the section of the pipeline that would stretch from an Iraqi oil
pumping station in Haditha, west of Iraq, to Aqaba. The rest of the
pipeline, which is 680 kilometers long, linking a Basra pumping
station with the one in Haditha would be built and financed by the
Iraqi oil ministry.
Iraq hopes the pipeline will make it less dependent on Persian
Gulf export terminals, providing the country with an alternative
route if Iran closes the Strait of Hormus. Tehran has threatened on
several occasions to close the strategic waterway through which 35%
of the world's shipborne oil is exported, most recently in response
to international sanctions over its suspect nuclear program.
Last year Iraq started design and feasibility studies on the
pipeline that's expected to carry 2.25 million barrels a day. The
country is now preparing to start work on the section from Haditha
to Aqaba, with a capacity of 1 million barrels a day.
A third section of the pipeline, running to Syria's Banias port
in the Mediterranean, has been postponed because of the conflict in
the neighboring country. It would have a capacity of 1.25 million
barrels a day.
Under the agreement signed in April, Iraq would supply
energy-poor Jordan with 150,000 barrels a day to feed its Zarqa
refinery near Amman. Iraq will also supply Jordan with 100 million
cubic feet a day of gas via another pipeline that will be built
parallel to the oil line.
Tuesday Iraq decided to extend an oil export agreement to supply
Jordan with crude for one year, without giving more details. Iraq
exports some 10,000 to 15,000 barrels a day to Jordan at a heavily
discounted price of dated Brent minus $18 a barrel.
Iraq sits on some of the world's largest oil reserves and was
once a major exporter of crude. It's now trying to rebuild an
industry that was devastated by years of war and sanctions.
Write to Hassan Hafidh at hassan.hafidh@dowjones.com
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