Iraq's cabinet awarded a $518 million contract for an oil export expansion project to Leighton's Singapore-registered Leighton Offshore Pte Ltd, an Iraqi government spokesman said. Leighton is the Australian unit of Germany construction group Hochtief.
Leighton will build a single point mooring buoy (SPM) with an export capacity of 900,000 barrels per day and construct a 48-inch sea export pipeline to transport crude from storage depots in Iraq's southern Faw peninsula to the new floating terminal, Ali al-Dabbagh, the spokesman said.
Leighton should complete engineering, procurement and construction work within 16 months, and the project is to be financed by a Japanese government fund.
The whole expansion project underway in the southern Basra oil region involves building two marine pipelines and one onshore pipeline and installing four single point moorings (SPMs) for loading oil tankers at a total cost of about $1.3 billion. Foster Wheeler AG is handling the project management consultancy services.
Iraq expects to turn on the tap at one of three new oil export terminals in the Gulf on Jan. 1, a major milestone in its effort to build export capacity to handle increasing output from southern oilfields.
The country has signed a host of deals with oil majors to boost production capacity to 12 million bpd by 2017, but Oil Minister Abdul-Kareem Luaibi said recently that a plateau target of 8 million to 8.5 million would be more suitable and that the period could be extended to 13 or 14 years.