Hassan Hafidh Dow Jones Newswires September 29, 2010 6:19AM
IRAQ has approved a $US733 million ($758m) deal for Leighton Offshore Private to build a new oil export terminal in the city of Basra.
"The capacity of the new terminal will be 1.8 million barrels a day," Ali Al Dabbagh told Dow Jones Newswires by telephone from Baghdad.
Mr Dabbagh said when the new floating terminal is completed it would bring Iraq's oil exports capacity from southern terminals on the Gulf to 3 million barrels a day. The terminal should be up and running in 15 months from the start of work.
He said the cabinet approval came after the Iraqi oil ministry sent a request to award the contract to the company. Leighton Offshore was chosen out of four international companies which were invited to submit offers for the project.
Mr Dabbagh said that the project also includes extending pipelines to the terminal.
Some $US175 million out of the total value of the project has been already allocated from the country's budget this year, he said. The rest would be allocated in the 2011 budget, he added.
Iraq's two terminals, Basra and Khor al-Amaya, have a total export capacity of 1.6 million barrels a day.
Foster Wheeler last July won a project management consultancy service contract for the project.
Iraq aims to install four new floating oil terminals and three new undersea oil pipelines to replace aging ones in Basra port with the aim of boosting export to 8 million barrels a day.
The capacities of southern export terminals need to be increased to cope with an expected production boom after Baghdad signed with international oil companies over the last 10 months some 11 mega deals to develop some of its prized oil fields.
Baghdad said that its production could reach some 12 million barrels a day from the current 2.5 million barrels a day in 2017 if companies met their pledge to boost production.
LEI Price at posting:
$33.44 Sentiment: Buy Disclosure: Held
