* Contract announcement imminent -sources
* Could be worth up to $2 bln -source
* Saipem presents 2015 targets next month
By Stephen Jewkes
MILAN, Jan 27 (Reuters) - Embattled Italian oil servicesgroup Saipem is in pole position to win a contractworth up to $2 billion to replace pipes at the Kashagan oilfieldin Kazakhstan, two sources with knowledge of the matter said onTuesday.
Saipem has had 10 billion euros ($11.31 billion) wiped fromits value over the past two years, hit by two profit warnings, acorruption investigation in Algeria and a grim industry outlook,but the new Kashagan tender could provide a timely boost beforeit announces 2015 targets next month.
"The contract is imminent and Saipem should net orders worth$1.5 billion to $2 billion," one of the sources said.
Saipem, 43 percent owned by oil major Eni, won the2004 contract to lay the pipeline network for the $50 billionKashagan project, which has been plagued by delays and costoverruns.
Production finally started in September 2013 but was haltedweeks later after discovery of gas leaks caused by stressfractures. Senior sources said the fault lay in the pipespecifications given to the manufacturer.
"Saipem's a clear frontrunner," the second source said."Being involved in the original contract hasn't sullied thewaters too much and its experience in the Caspian, where italready has barges, is a key attraction."
The Kashagan consortium -- comprising Eni, Exxon Mobil, Royal Dutch Shell, Total, China'sCNPC, Japan's Inpex and Kazakhstan'sKazMunaiGas -- aims to begin replacing the pipelinein spring next year and restart operations in the second half of2016.
The Kashagan tender has taken on added significance forcontractors feeling the effects of reduced spending by oilmajors in the face of tumbling oil prices.
"Investors are on tenterhooks for Saipem's new guidance andany big contract awards would be manna from heaven," an oilanalyst following Eni said, adding that he expects the group totarget 2015 operating profit of 550-600 million euros.
Saipem declined to comment and the consortium said thetender process had not been completed yet.
The consortium's proposed timetable for the remedial workhas been questioned by some.
"That already looks like a very tight deadline and couldprove ambitious, given the sea is frozen for four months eachyear," Wood Mackenzie's Russia & Caspian analyst Ashley Shermansaid.
Saipem is due to present its new targets on Feb. 16.($1 = 0.8839 euros)
(Additional reporting by Dmitry Solovyov; Editing by DavidGoodman)
