Iraq has awarded steel production firm Jindal Saw Ltd. a $198 million contract to build and operate a factory for manufacturing oil and gas pipelines in the south, a senior investment official said on Monday.
The 25-year deal for the factory is part of Iraq's plans to revive its neglected industry sector and the pipelines produced will be used in oil development projects in the country's southern oilfields, Khalaf al-Badran, chairman of Basra Investment Commission, said.
"We have giant oil projects moving ahead in the province and such a project should cut expenses for purchasing oil pipelines for Iraq," Badran told Reuters.
Iraq has signed a bundle of oil deals with foreign firms to develop its lucrative oilfields with an ambitious target of reaching an output of 8-8.5 million barrels per day by 2017.
Violence and corruption deprived Iraq of investment during the years of conflict triggered by the 2003 U.S.-led invasion to topple Saddam Hussein and the country is slowly trying to rebuild its dilapidated infrastructure.
Phoenix International Iraq, a unit of Danish construction firm Phoenix International A/S, also signed an $86 million contract to build and operate another pipeline factory in Umm Qasr port in the southern oil hub of Basra, Badran said.
The factory will manufacture pipes for transporting oil, natural gas and water, and the duration of the license is 35 years, he said.