Iraq's cabinet has just approved a $733 million [880 billion Iraqi dinar] deal to build a new oil export terminal in Basra, a spokesman for the Iraqi government said on Tuesday.
The work will be carried out by Leighton Offshore Private Ltd., which was selected from four international companies invited to tender for the project.
This is the same project for which Foster Wheeler (FWLT) won the contract for project management consultancy services last July.
"The capacity of the new terminal will be 1.8 million barrels a day," Ali Al Dabbagh told Dow Jones Newswires.
The new floating terminal will bring Iraq's oil export capacity from southern terminals to 3 million barrels a day, and it is expected to be completed in 15 months from the start of work. The project includes extending pipelines to the terminal.
Bloomberg quotes al-Dabbagh as saying that $175 million of the total value of the project has been already allocated from Iraq's 2010 budget, with the rest allocated to 2011.
Iraq's two terminals, Basra and Khor al-Amaya, currently have a total export capacity of 1.6 million barrels a day.
Iraq aims to install four new floating oil terminals and three new undersea oil pipelines to replace aging ones in Basra port with the aim of boosting export to 8 million barrels a day.
Total production is expected to hit 12m bpd within six years.
Leighton Offshore Private Ltd is part of the Leighton Group, Australia’s largest project development and contracting group. The Leighton Group’s major shareholder is the German giant Hochtief AG, the world’s largest international contractor.
(Sources: Dow Jones, Businessweek, Reuters, Leighton International)