Iraq to Install New Export Terminals & Pipelines

Source: Reuters 11/27/2009, Location: Middle East

Iraq aims to install four new floating oil terminals and three new undersea oil pipelines that will boost export capacity to 8 million barrels per day from a current 1.9 million bpd, a top oil official said.

Dhiya Jaafar, current chief of Iraq's South Oil Co. (SOC), which oversees the bulk of exports from the country's vast oil reserves, work should be completed on the new terminals and pipelines in the second half of 2011.

"There is a plan ready and it is under execution to establish four floating platforms and three new undersea pipes (We aim) to finish this work in the second half of 2011," he said, adding this would boost capacity to 8 million bpd.

Iraq has a clutch of deals with global oil majors that it hopes will push it to third from eleventh place among the world's oil producers. A contract with Britain's BP and China's CNPC to develop the country's super-giant Rumaila field has already been finalized.

BP, CNPC and the SOC have agreed that current production from Rumaila is 1.05 million bpd, Jaafar said. The baseline output figure will be used to determine the foreign firms' future performance in boosting output, to which their level of remuneration is pegged.

Iraqi oil exports reached 1.868 million bpd in October, including exports from the country's northern fields. The bulk of Iraq's oil reserves, the world's third largest, are in the south, and are currently pumped through two offshore terminals.

Decrepit Infrastructure
Three pipelines carry oil to the Khor al-Amaya and al-Basra oil terminals, but equipment is old and decrepit after years of wars and sanctions, and the existing pipes cannot handle the pressure of a faster pumping rate.

Jaafar said Foster Wheeler and Britain's Maritime and Underwater Security Consultants, or MUSC, were giving advice, conducting surveys, or clearing the seabed, to help SOC prepare for the pipeline and terminal projects.

He added that new oil storage and pumping facilities were being built to handle the expected increase in oil production as a result of the new oilfield development deals.

A consortium led by Exxon Mobil has clinched an initial agreement to develop Iraq's West Qurna Phase One oilfield and another group headed by ENI has an agreement to develop the Zubair field.

Both deals are awaiting cabinet approval. The Rumaila, Zubair and Qurna deals would nearly triple Iraq's oil output to about 7 million bpd from around 2.5 million bpd.

A second round of tenders for lucrative contracts for 10 largely undeveloped Iraqi oilfields is scheduled for December 11-12.

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