Gazprom Neft selects contractor to lay pipeline in Iraq

10 April 2014

Gazprom Neft, operator ofthe Badra oilfield development project, has appointed acontractor tolay the pipeline connecting the field tothe power station inZubaidiah (Wasit Province). The tender was won byPakistani company Techno Engineering Services (Pvt.) Ltd.

Inline with the contract, Techno Engineering Services will produce the designs, supply the equipment and materials, and carry out construction ofthe pipeline. First gas transportation via the pipeline, which isalmost 100km inlength and has adaily capacity of4.4 million cubic metres (circa 1.6 billion cubic metres per year), isplanned for 2015.

Under Gazprom Neft’s contract with the Iraqi government for the development ofthe Badra oil field, investors are tobecompensated for costs related toinfrastructure construction.

Gas supply from the Badra oil field will enhance the Zubaidiah power station’s daily power output and provide a24-hour power supply tothe city ofKut, which currently has electricity supplied for only 16hours per day. Some ofthe extracted gas will beused toprovide electricity tothe Badra oil fields themselves.

InMarch Gazprom Neft completed testing onasecond well atBadra. The laying and testing ofthe oil pipeline tothe Gharraf oilfield was completed inFebruary, connecting the section toIraq’s main pipeline system. The construction ofthe first phase ofacentral gathering station point with acapacity of60,000 barrels per day isnearing completion. Work has also started onagas treatment plant with the capacity toprocess 1.5 billion cubic metres per year.

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REFERENCE

The Badra oil field islocated inWasit Province inEastern Iraq. According topreliminary estimates, geological reserves atthe Badra field amount to3billion barrels ofoil. The contract with the Iraqi government todevelop the oil field was signed inJanuary 2010 following atender process. The winning bid was submitted byaconsortium ofcompanies consisting ofGazprom Neft, KOGAS (Korea), PETRONAS (Malaysia), and TPAO (Turkey).

Gazprom Neft’s share inthe project is30%, while KOGAS has 22.5%, PETRONAS has15%, and TPAO has 7.5%. The Iraqi government, represented inthe project bythe Iraqi Oil Exploration Company (OEC), has a25% share. Gazprom Neft isthe project operator.

The Badra oil field development project isintended tolast 20years, with apossible extension ofafurther five years. Commercial production atthe field isexpected tostart in2014. By2017, the production volume isforecast toreach 170,000 barrels ofoil per day (approximately 8.5 million tonnes per year) and remain atthat level for seven years. Atotal of17production wells and five injection wells are planned atthe field.