The Iraqi government has approved the award of a $2.45bn contract to South Korean contractor Hyundai Engineering & Construction (Hyundai E&C) for engineering, procurement and construction (EPC) of a seawater treatment plant in the country’s Basra Governorate.

The project is part of the larger Common Seawater Supply Project (CSSP), which is one of four main components of the estimated $10bn Gas Growth Integrated Project (GGIP) masterplan that targets the overall development of the Ratawi, or Artawi, oil and gas field in Basra.

The Iraqi Council of Ministers, in a meeting on 10 August chaired by Prime Minister Mohammed Shia Al-Sudani, approved the contract award for tender number CSSP-ITT-05 to Hyundai E&C.

The contract was originally awarded to Hyundai E&C by state-owned Basra Oil Company (BOC) in 2019, but was pending ratification from Baghdad. The six-year delay in official government approval for the contract award is understood to be due to a lack of conformity to project tendering processes, failure to adhere to procurement standards, and legal and financial oversight by the project stakeholders.

The official Iraqi News Agency carried a statement on 10 August that said: “The decision includes approving recommendations to ratify the price negotiation results and awarding the tender under an exception from Government Contracts Implementation Instructions No. 2 of 2014, to address measures taken between 2018 and 2021 in accordance with financial authorities.

“A specialised investigative committee will be formed to look into legal violations committed in 2018 regarding the direct invitation to a number of companies without obtaining the necessary approvals, with the results to be presented later to the prime minister for a decision,” it added.

The statement further said that “the Council of Ministers also approved increasing the cost value of the project to rehabilitate a composite water unit in Beit Atiya village, Maysan Province”.

The Iraqi government approval for Hyundai E&C’s EPC contract award came within days of BOC issuing China Petroleum Engineering (CPE) a letter of award for a second CSSP package covering a major seawater transmission pipeline to be built in Basra.

Work on the $2.52bn contract for the project will be carried out by CPE’s engineering arm, China Petroleum Pipeline Engineering (CPPE), the contractor said in a statement in early August.

The total duration of EPC works on the project is 54 months, of which 42 months will be allocated for design, procurement, construction and trial operation, while 12 months will be dedicated to operation, maintenance and training.

A central element of the broader GGIP masterplan, the CSSP is designed to support oil production in Iraq’s southern oil and gas fields – mainly Zubair, Rumaila, Majnoon, West Qurna and Ratawi – by delivering treated seawater for injection, a method used to boost crude recovery rates and improve long-term reservoir performance.

The GGIP programme is being led by French energy major TotalEnergies, which is the operator and holds a 45% stake. BOC and QatarEnergy hold 30% and 25% stakes, respectively. The consortium formalised the investment agreement with the Iraqi government in September 2021.

The three other projects that comprise the GGIP are:

The Ratawi gas processing complex

A 1GW solar power project for Iraq’s electricity ministry

A field development project at Ratawi, known as the Associated Gas Upstream Project (AGUP)

(CPECC) won a $1.61bn contract in May to execute EPC works to build the gas processing complex at the Ratawi field development.

CPECC’s project team based in its office in Dubai is performing detailed engineering works on the project.

In August last year, TotalEnergies awarded China Energy Engineering International Group the EPC contract for the 1GW solar project at the Ratawi field. A month later, QatarEnergy signed an agreement with TotalEnergies to acquire a 50% interest in the project.

The 1GW Ratawi solar scheme will be developed in phases that will come online between 2025 and 2027. It will have the capacity to provide electricity to about 350,000 homes in Iraq’s Basra region.

The project, consisting of 2 million bifacial solar panels mounted on single-axis trackers, will include the design, procurement, construction and commissioning of the photovoltaic power station site and 132kV booster station.

Separately, in June, TotalEnergies awarded CPPE an EPC contract worth $294m to build a pipeline as part of a package known as the Ratawi Gas Midstream Pipeline.

Also, TotalEnergies awarded UK-based consultant Wood Group a pair of engineering framework agreements in April, worth a combined $11m, under the GGIP scheme. The agreements have a three-year term under which Wood will support TotalEnergies in advancing the AGUP.

One of the aims of the AGUP is to debottleneck and upgrade existing facilities to increase production capacity to 120,000 barrels a day of oil on completion of the first phase, according to a statement by Wood.