Daewoo Engineering wins Akkas Gas processing plant
The South Korean Gas Corporation (KOGAS) and the local Iraq National Oil Company (INOC) have awarded to Daewoo Engineering, & Construction Corporation (Daewoo Engineering) also from South-Korea, the engineering, procurement and procurement (EPC) contract for the gas central processing facility (CPF) of the Akkas gas field in the western of Iraq.
Located in the Al-Anbar Province, 460 kilometers northwest of Bagdad, close to the Syrian border, Akkas is the first non-associated gas field to be developed as part of the license rounds proposed by the Iraq Federal Government to foreign companies after the second Iraq war.
From the actual level of exploration the Akkas gas field is expected to hold between 3.3 and 5.6 trillion cubic feet (tcf) reserves of non-associated natural gas from which KOGAS and its partner NOC are planning to extract more than 2.1 tcf.
In October 2010, KOGAS in joint venture with KazMunaiGas (KMG) from Kazakhstan and the Iraq state owned company INOC applied to participate to the reverse auctions of the third license round organized by the Iraq Federal Government.
These license rounds were based on Technical Service Contracts (TSC) meaning that the winner of the bid is supporting all investment until a plateau production level above which it is compensated by a remuneration fee per barrel produced.
Since the contract is defined as “technical”, this remuneration fee is fixed regardless the commercial value of the oil and gas.
In October 2011, KOGAS and its partners were awarded the Technical Service Contracts (TSC) for the Akkas gas field with a remuneration fee of $5.50 per barrel of oil equivalent (boe) based on a plateau production of 400 million cubic feet per day (cf/d) during 13 years.
KOGAS to meet Iraq Government plateau production
– KOGAS 75% is the operator
Despite the danger of the Al-Anbar Province along the Syrian border where KOGAS contractors had workers killed and kidnapped in April, KOGAS received four bids for the EPC contract of the Akkas gas central processing facility (CPF).
From this call for tender, the South-Korean Daewoo Engineering company submitted the most competitive bid, just below $800 million.
– Associated gas gathering inlet pipeline
– Export pipeline