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April 9, 2020

Iraq likely to suspend $4.7bn oil project

By MEED   

Contractors expect work on phase two of the Majnoon oil field development project to be suspended over the coming weeks, according to industry sources.

The client on the $4.7bn project is state-owned Basra Oil Company (BOC).

“BOC has signalled that the suspension of work on the project is likely in coming weeks,” said one source. “There is yet to be any official communication on this subject, but we know that work is going to stop.”

Iraq was previously planning to raise output from its southern Majnoon oil field to 450,000 barrels a day by the end of 2021.

Majnoon is a super-giant oil field located 60 kilometres from Basra in southern Iraq. It is one of the richest oil fields in the world with an estimated 38 billion barrels of oil in place.

Earlier this year, BOC awarded a $200m contract to China Petroleum Engineering & Construction Corporation (CPECC) for a planned sour gas treatment facility that forms part of phase two of the Majnoon oil field development project.

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The contract covers front-end engineering and design (feed) as well as engineering, procurement and construction (EPC). It was awarded on 10 March and has a duration of 29 months.

US-based KBR is the project management consultant (PMC) for the project. The scope of work on the project includes acid gas treatment, public works, auxiliary facilities and inter-station pipelines (about 22km, maximum 36in pipelines).

The sour gas treatment facility will have a processing capacity of 155 million standard cubic feet a day.

After receiving the acid gas from the upstream crude oil processing facility, it will be metered out to the downstream pipe network and power plant after being piped, gas-gathered, pressurised and dehydrated.

This article is published by MEED, the world’s leading source of business intelligence about the Middle East. MEED provides exclusive news, data and analysis on the Middle East every day. For access to MEED’s Middle East business intelligence, subscribe here.

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