Iraq to announce in July firms to build oil pipeline to Jordan

Iraq plans to announce in July prequalified companies to build the country's first oil export pipeline in decades via Jordan, a senior Iraqi oil official said Wednesday.

Nihad Mousa, a director general at the Iraqi oil ministry , said that Japanese, Russian, Chinese and South Korean consortia have submitted documentation to qualify to build the pipeline. European and other companies have also shown an interest, she said.

"A large number of international companies have submitted their documentation to qualify for the project," Ms. Mousa, head of the State Company for Oil Projects, or SCOP, told Dow Jones Newswires. The project is expected to cost some $18 billion.

"We will start reviewing these documents from July 3 and we expect to announce names of prequalified firms in a week or 10 days from that date," she said.

In April, Iraq and Jordan signed a preliminary agreement to build a 1,680-kilometer pipeline stretching from the oil hub of Basra in southern Iraq to the Jordanian Red Sea port of Aqaba.

Iraq hopes the pipeline will make it less dependent on Persian Gulf export terminals, providing the country with an alternative route if Iran closes the Strait of Hormuz. Tehran has threatened to close the strategic waterway through which 35% of the world's shipborne oil is exported, most recently in response to international sanctions over its suspect nuclear program.

The proposed pipeline consists of two phases: one runs from Haditha, northwest of Baghdad, to Aqaba, and will carry 1 million barrels a day; the second from Haditha to the Syrian Mediterranean port of Banias, carrying some 1.25 million barrels a day.

The oil ministry has received documentation and interests from a "large number of companies" to build the first phase section, Ms. Mousa said.

"Once we announce the prequalified firms, we will start distributing the invitation of tender to them," she added.

Iraq has started design and feasibility studies on the 680-kilometer section from Basra to Haditha, she said, and is now preparing to start work on the section through to Jordan. The other pipeline to Syria has been postponed because of the conflict there.

Following the conclusion of several oil field development deals with some of the world's largest oil firms, Baghdad is diversifying its export facilities as the country plans to increase its output to 4.5 million barrels a day next year from 3.2 million barrels a day currently, and to 9 million barrels a day in 2020.



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