Iraq Invites Bids to Build First Phase of Oil Export Pipeline to Jordan

Source: Reuters 12/11/2016, Location: Middle East

Iraq has invited energy companies and investors to bid to build and finance the first phase of a pipeline that will eventually connect the southern city of Basra with Jordan's Red Sea port of Aqaba.

The State Company for Oil Projects (SCOP), an oil ministry arm overseeing the project, said the first phase includes the engineering, procurement, construction and financing of oil and gas pipelines linking the Basra fields to a connecting energy station near the city of Najaf.

The initial section of the Basra-Aqaba pipeline was planned to pass through the Haditha pumping station in Anbar province, but the presence of Islamic State militants in the desert area forced the oil ministry to change plans.

The pipeline will still pass through Anbar, but it will not go as far north as Haditha. By limiting the first stage to Najaf, the ministry is also delaying construction in Anbar itself. SCOP manager Nihad Moussa said the closing date for bids is Dec. 25 and a bidding round is expected to be held in the first quarter of 2017.

The planned 350km (220 miles) pipeline will have capacity to ship 2.25 million barrels per day (bpd) and will have a parallel gas pipeline, Moussa said. The project's chief engineer Akram Shafeeq said that work on the initial phase of the export project should start in 2018 and end in 2020.

A proposed payments schedule was discussed with interested companies in Basra, Shafeeq said, adding that investments would be recouped within five years of the project's completion.

In 2013 Iraq pre-qualified 12 companies and joint ventures to build an $18 billion export pipeline to Jordan, but the project was delayed by Islamic State's takeover of territory in the west of the country where the pipeline will be laid.

Iraqi security forces have driven Islamic State from several cities and towns in the western Anbar province, which borders Jordan, but the militants still hold some territory. The plan is to export 1 million bpd of Iraqi crude to Jordan, of which 150,000 bpd will supply Jordan's Zarqa refinery, with the remainder exported through the port of Aqaba.

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