China Petroleum Pipeline Engineering Corp. and Iraq's State Company for Oil Projects, or SCOP, secured a contract worth up to $317.125 million to build an oil pipeline that links Missan oil fields to the export terminals in southern Iraq, a government statement and a senior Iraqi oil official said.

CPPE and SCOP will build over 14 months a 272 kilometer pipeline linking oil fields in Missan governorate to the export terminals in the Gulf, an Iraqi government statement said.

Nihad Mousa, a director general at the Iraqi oil ministry, said SCOP would build 60 kilometers out of the pipeline, while the rest will be built by CPPE.

The new pipeline will link newly developed Halfaya, Buzurkan, Fuka and Abu Ghareb with the export terminals. The existing pipeline is very old and cannot handle increasing production from these fields, Ms. Mousa said.

Chinese firms are upgrading oil fields in Missan governorate in southern Iraq. PetroChina, a subsidiary of China National Petroleum Corp., or CNPC, is the operator of Halfaya oil field along with Total SA (TOT, FP.FR) and Petronas Calgari. CNOOC Ltd. (0883.HK, CEO), the Hong Kong-listed unit of China National Offshore Oil Corp, is developing along with state-run Turkish Petroleum Corporation, known as TPAO, three other fields in the governorate--Buzurkan, Fuka and Abu Ghareb.

PetroChina started last year first production from Halfaya at 100,000 barrels a day. Production from the field is expected to hit 200,000 barrels a day by the end of this year. The remaining three fields are producing more than 100,000 barrels a day.

Iraq, a member of the Organization of the Petroleum Exporting Countries, or OPEC, is targeting some 3.5 million barrels a day of total crude oil production by the end of this year, from current 3.2 million barrels a day now. Iraq is also hoping to reach 4.5 million barrels a day next year.