A consortium comprising China Petroleum Engineering & Construction Corporation and Italian industrial project provider PEG (Progetti Europa & Global SPA) has been awarded a US$308 million construction contract by Petronas Group for a crude oil treatment plant in Iraq.

The Garraf oil field is located near Nasiriya, which lies west of Basra. The two contractors will add oil processing trains to the oil field development. The plant is managed by Petronas Carigali Holding Iraq Holding BV, a subsidiary of the Malaysian Petronas Group.

Rome-based PEG was backed by a joint guarantee offered by export credit agency Sace Simest and Intesa Sanpaolo. PEG is active in the design and construction of turnkey industrial plants for the oil & gas sector, as well as the design and management of infrastructure such as railways, motorways, ports and airports. The company is especially active in the Middle East and North Africa.

China Petroleum Engineering & Construction Corporation is an affiliate of China National Petroleum Corporation (CNPC), whose subsidiaries include the listed unit PetroChina. The firm specializes in oil engineering, manufacturing, construction and turnkey contracting.

"We are very proud of this operation because it was finalized in partnership with a global player like China Petroleum Engineering & Construction Corporation," comments Paolo Trocca, president of PEG. "We believe this is the result of the bet made in 2012 to ensure a strategic physical presence in the region thanks to the Dubai branch and the Iraq branch. It is essential, especially in a complex market like the Iraqi one, to be close to the main international oil companies and the Ministry of Oil, which have their operational headquarters in Baghdad and Basra."

Sace Simest and the Bank of China, Milan Branch, recently signed a Memorandum of Understanding (MoU) to develop opportunities for trade and investment between Italy and China. The MoU is a follow up to the positive partnership signed at the end of August in Beijing between Cassa Depositi e Prestiti (parent of Sace) and Bank of China, which also aims to expand the collaboration in the field of export finance.

Under the MoU, which was signed on 6 November during the China International Import Expo held in Shanghai, Sace Simest and Bank of China committed to assist Chinese enterprises that import goods and services from Italy. The parties have also agreed to focus on aviation transactions as a high priority, especially with reference to the civil helicopter sector in China. In light of the well-established relations between Shanghai-based civil aviation companies and their Italian counterparts, Sace Simest and Bank of China will join efforts to evaluate and support the future trade of civil helicopters and civil aviation in general.

"We are very proud to strengthen our partnership with Bank of China, confirming our commitment to sustain Italian companies in a key market such as China, with a particular focus on the civil aviation and helicopter sector, to further support outstanding Italian technology and know-how," says Alessandro Decio, CEO of Sace. "This cooperation agreement is an important step towards the consolidation of trade relations between our two countries".

"Italy is very good at designing and manufacturing, while China is now faced with the challenge of upgrade of consumption and industry," says Jiang Xu, general manager of Bank of China Milan Branch. "There could be great opportunities for the two countries to engage in the synergy of business development. In the future, Bank of China and Sace will pursue together in this direction for the benefit of both countries."

With this agreement, Bank of China, Milan branch, confirms its established role as mediator between the Chinese and Italian markets, renewing its commitment to support the integration and development of business between the two systems. This new collaboration will exploit Sace Simest's consolidated experience in the local and international markets and thus expand the opportunities for global collaboration.

The Garraf oil field is located in the province of Thi Qar, approximately five kilometres northwest of Al-Refaei city and 85km north of the city of Nasiriya.

The field is owned by Petronas Carigali Iraq Holding BV (45%), Japan Petroleum Exploration Co., Ltd. (Japex, 30%) and North Oil Company (Iraqi national oil company as a state partner, 25%).

The consortium was awarded the contract for the development and production of Garraf Oil Field in November 2009. Development works for the oil field started in early 2011. Initial production started in August 2013, and with new trains being built there is a plateau production target of 230,000 barrels per day by the fourth quarter of 2020.