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October 15, 2021

Turkish and Chinese firms vie for Iraq pipeline

According to MEED, China Petroleum Pipeline Engineering and Tekfen are at the forefront for the pipeline contract of Iraq’s $4bn Common Seawater Supply Project (CSSP).

By MEED   

State-owned China Petroleum Pipeline Engineering and Turkey’s Tekfen are frontrunners to win the pipeline contract as part of the Iraq $4bn Common Seawater Supply Project (CSSP), according to a report by Middle East business intelligence service MEED.

In September, the French energy company TotalEnergies, previously known as just Total, signed a $27bn energy deal in Iraq that included taking on several major energy projects, including the CSSP.

The pipeline package is estimated to be worth $1.5bn.

MEED reports that the four entities that submitted technical bids for the CSSP’s pipeline package in 2019 were:

  • Petrofac (UK) / China Harbour (China)
  • Hyundai Engineering & Contracting (South Korea) / Saipem (Italy)
  • China Petroleum Pipeline Engineering Company (CPP – China)
  • Tekfen (Turkey)

Aside from the pipeline package, the other major package that forms part of the CSSP project is for the water processing plant.

South Korea’s Hyundai Engineering & Contracting is the frontrunner to execute the water processing plant contract.

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Hyundai E&C was previously awarded a $2.45bn contract for the CSSP’s water treatment plant package in June 2019, but the company was never deployed to execute the project amid growing uncertainty over how it would be funded.

It is understood that TotalEnergies is keeping Hyundai involved with the project, although the scope of its contract may be altered.

The CSSP has been redesigned and delayed multiple times since it was initially announced with a budget of $13bn.

The project aims to bring large volumes of water into Iraq’s main oil-producing areas to be injected into wells, boosting oil output.

The water will be transported by pipeline from the sea and purified in large treatment plants.

It has strategic importance for Iraqi oil production as a lack of water in Iraq’s Basra region restricts oil production at many of the country’s biggest oil fields as they mature.

Water shortages are also causing political issues and social unrest.

A report published in 2019 by Human Rights Watch concluded that for almost 30 years, Iraqi authorities have failed to ensure that Basra residents have sufficient, safe drinking water, resulting in ongoing health concerns.

The situation culminated in an acute water crisis in 2018 that sent at least 118,000 people to the hospital and led to violent protests.

Energy Transition in the Middle East

A major new report from MEED looks at how the global shift away from fossil fuels is reshaping energy policy in the Middle East and North Africa, and its impact on business and project investment. Learn more about the report here.

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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