Italian, Saipem has been awarded a $1.8bn contract to construct two 95km underwater pipelines in the Kazakhstan area of the Caspian Sea were the largest and most expensive, oil discover for the past 40 years is being exploited.
The award was made by the North Caspian Operating Company (NCOC), an oil operator that was set up to exploit the Kashagan oil field, and which is partly owned by seven oil firms.
The work will be undertaken by Saipem’s ERSAI Caspian Contractor subsidiary. The pipelines will connect the “Island D” production facility to the Karabatan onshore plant. Island D is one of a number dredged up as part of the $46bn programme to develop the 13 billion barrels of oil that are believed to be contained in the Kashagan’s reservoir.
As well as installing the lines, the project includes their engineering, welding, dredging, installation and pre-commissioning. Some of the work will be executed in conjunction with specialised subcontractors.
Umberto Vergine, the chief executive of Saipem, said: “This is a very important contract working for some of the most important oil companies in the world in a key region for us.”
One of the pipelines will replace another built by Saipem that began leaking in September 2013. Construction is due to be completed by end of 2016.
The Kashogan was discovered in 2000 and the first oil was taken from it at the beginning of 2013. Among the members of the NCOC is the China National Petroleum Corporation. China paid $5bn for a little over 8% of the Kashogan field in 2013 and also put $3bn toward Kazakhstan’s development costs.