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. Last Updated: 07/27/2016

LUKoil Gives McDermott Caspian Deal

BAKU, Azerbaijan -- LUKoil, awarded a contract to a subsidiary of U.S. energy services company McDermott to build an oil pipeline under the Caspian Sea, the U.S. company said Friday.

Under the contract, McDermott Caspian Contractors will lay a 58-kilometer pipeline to LUKoil's Yury Korchagin oil and gas field, located in the northwestern, Russian section of the sea, the company said.

"The volume of construction work in Russia's oil and gas sector is gathering pace and we are proud to be working with LUKoil on this world-class project," Dan Houser, president and general manager for the company's Caspian operations said in a statement.

McDermott did not say how much the pipeline project would cost; RIA-Novosti reported that the entire project to develop the field, including the pipeline, would cost $700 million.

The field is due to come onstream in 2008 with annual capacity of 80,000 barrels per day and 10 billion cubic meters of gas per year.

The Caspian Sea has some of the largest oil and gas fields in the former Soviet Union. Most are located in the section of the sea controlled by Azerbaijan.