An engineering and construction unit under China's Sinopec Group has started building pipelines for Iraq's Maysan project that will help raise the oilfield's production to 460,000 barrels per day (bpd) by 2016, an industry website reported on Tuesday.

Iraq had set a production capacity target of 12 million bpd by 2020, which would rival that of top oil exporter Saudi Arabia, after it signed service contracts in 2009-2010 to develop its southern oilfields.

China is Iraq's largest oil buyer, and its state energy firms, including PetroChina and CNOOC Ltd, together hold more than a fifth of the country's oil projects after securing some of its premium fields through auctions.

Daqing Engineering and Construction Company, owned by state energy group Sinopec, started laying 30 km of pipelines and building power stations last week for the Maysan field, of which China's CNOOC Ltd is the operator, according to a report on news.cnpc.com.cn.

CNOOC won the service contract for Maysan in 2010, in partnership with state-run Turkish Petroleum Corporation (TPAO) and Iraq Maysan oil Company under a 20-year contract.