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PetroChina, CNOOC and Missan Oil prepare tender for Iraq export pipeline

CNPC to connect Halfaya field to Al-Fao export terminal

The joint venture between the national oil companies China National Petroleum Corporation (CNPC), also called PetroChina, together with its partners China National Offshore Oil Corporation (CNOOC) and the local Missan Oil Company (MOC) are preparing the call for tender of the export pipeline to connect the Halfaya oil field to Al-Fao export terminal.

The Halfaya oil field is located in southern Iraq and is part of these oil fields auctioned by the Iraq Government on the basis of Technical Services Contracts (TSC).

Estimated to hold 4.1 billion barrels of crude oil reserves, the Halfaya oil field Technical Services Contract has been awarded by Iraq Government during the second round of international auctions in December 2009 to the consortium led by PetroChina in partnership with Total, Petronas and MOC.

PetroChina is the operator.

CNPC and it partners Total, Petronas and Missan Oil won Halafya auction based on a Remuneration Fee per Barrel (RFB) below $2.

According to the terms of the Technical Services Contract, this remuneration fee is the only compensation given to the joint venture to balance the capital expenditure required to restore the Halfaya oil field and ramp up production.

To optimize the financial pay back of the investment, PetroChina and its partners are planning to increase the crude oil production to 535,000 barrels per day.

Since December 2010, PetroChina initiated a large program of 3D seismic survey and drilled three horizontal appraisal wells at 4,000 meters depth.

All these information and collected data were analyzed quickly in 2011 allowing PetroChina, Total, Petronas and Missan Oil to define its exploration and production strategy and to accommodate surface equipment accordingly.

PetroChina, CNOOC and Missan to proceed on fast track

To export the crude oil from the Halfaya field, PetroChina, a team of partners made of CNOOC and Missan Oil are committed to build an export pipeline to connect the Halfaya oil field to the Al-Fao export terminal in the Arabic-Persian Gulf.

This export pipeline would also collect the production from the Burzugan crude oil field.

Therefore the pipeline is designed in two sections.

The first section would link the Junction Point Pigging Station along the Halfaya field to the Bin Umar area.

This first section should be 125 kilometers long.

The second section would then connect Bin Umar to the Al-Fao export terminal and storage area.

This second section should cover 147 kilometers.

The both sections should have a diameter of 42-inch.

Along these two sections, the project includes:

 – Underground construction and installation of the pipeline

 – 14 pumping stations

 – Communication and control system

The project does not include all the pipes materials subject to a separate tender.

In this configuration, PetroChina and its partners CNOOC and MOC estimate the capital expenditure of the Halfaya export pipeline project around $400 million.

Since the Halfaya oil field is developed on the base of a Technical Services Contract, the time to reach the 535,000 b/d target of production is the priority for which this pipeline is the bottleneck.

In this context, PetroChina and its partners Total, Petronas, MOC, CNOOC in both projects have all interests to proceed on fast track to connect the Halfaya oil field to the Al-Fao storage facility and export terminal.

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1 Comment to “PetroChina, CNOOC and Missan Oil prepare tender for Iraq export pipeline”

  1. Who is the contracted EPC for this project?

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