The Iraqi cabinet has approved a USD 733 million deal for Leighton Offshore Private Ltd. to build a new oil export terminal in the southern city of Basra.
The capacity of the new terminal will be 1.8 million bpd, and when the new floating terminal is completed it should bring Iraq's oil exports capacity from southern terminals on the Gulf to 3 million bpd. The terminal should be up and running in 15 months from the start of work.
The cabinet approval came after the Iraqi oil ministry sent a request to award the contract to the company. Leighton Offshore was chosen out of four international companies which were invited to submit offers for the project.
The project also includes extending pipelines to the terminal. Foster Wheeler Ltd. (FWLT) last July won a project management consultancy service contract for the project. 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 bpd.
The capacities of southern export terminals need to be increased to cope with an expected production boom after Baghdad signed nearly a dozen deals with international oil companies to develop some of its prized oil fields since the beginning of 2010.