Page 8 - MEOG Week 30.indd

MEOG PIPELINES & TRANSPORT MEOG

Iraq set to resume exports to Jordan

IRAQ/JORDAN FOLLOWING last week’s agreement on the install the Basra-Najaf string and negotiations
resumption of oil exports to Jordan, Iraq has were claimed by Iraq’s Ministry of Oil (MoO) to
completed all of the required logistical prepa- be under way on a build-operate-transfer (BOT)
rations. Jordanian Energy Minister Hala Zawati contract covering construction of the 1,350-km
told press gathered in Amman that crude flows Najaf-Aqaba stretch.
had stopped after prices had fallen below $20 per Preliminary work to develop the $5bn con-
barrel. duit is thought to be nearing, with Iraqi Minis-
After lengthy delays, the first batch of Iraqi try of Oil (MoO) expected to announce contract
crude left Baiji for Jordan via Kirkuk in Septem- winners by the end of the year. In May the min-
ber 2019 under a deal for 10,000-barrel cargoes istry clarified that the pipeline inside Iraq would
to arrive daily by truck. be installed according to the engineering, pro-
From then until April this year, a total of curement, construction and financing contract
2.44mn barrels of oil were exported to Jordan, (EPCF) model, while in Jordan it would be
with the most recent cargoes unloaded into Jor- executed under the build-own-operate-transfer
danian trucks at the border in an effort to halt the (BOOT) system.
spread of coronavirus COVID-19. The Jordanian government has also approved
A bilateral deal was signed in February 2019 a deal with the Iraqi federal government to build
whereby the crude flows cover around 7% of Jor- two oil and gas pipelines connecting the neigh-
dan’s current demand, with the Hashemite king- bouring countries, Jordanian state-run news
dom buying the oil at a $16 per barrel discount agency Petra reported.
to Brent in order to cover the transport and The project is divided into two phases: the
deviation in specifications. In return, Iraqi goods first phase includes installing a 700-km pipeline
exported through the port of Aqaba receive pref- with a capacity of 2.25mn barrels from Rumaila
erential rates. to Haditha; the second phase includes installing
At the time, Zawati said: “This is the start of a 900-km pipeline in Jordan between Haditha
a new era in energy co-operation between the and Aqaba with a capacity of 1mn barrels, with
two countries.” a spur carrying 150,000 bpd to Jordan’s Zarqa
Prior to the deal, Jordan had not received any refinery.
Iraqi crude since 2014. Total cross-border capacity is anticipated
Zawati added that more than 200 trucks, to be 1mn bpd of oil and 258mn cubic feet
roughly 100 from each country, would be used (7.31mn cubic metres) per day of gas. According
to transport the oil to Jordan’s Petroleum Refin- to the Ministry of Energy & Mineral Resources
ery Co. at Zarqa. (MEMR), the kingdom’s average requirements
The country’s Ministry of Energy and Min- for power generation stand at 3.4 bcm per year,
eral Resoures (MEMR) floated a crude transport with much of the gas having arrived via the Arab
tender in March following the signing of a mem- Gas Pipeline or from FSRU moored at Aqaba.
orandum of understanding (MoU) between MoO spokesperson Assem Jihad said in mid-
Zawati and Iraqi Deputy Prime Minister for 2019 that “investment offers from international
Energy and Minister of Oil Thamir Ghadhban companies” were under evaluation on the basis
in Amman and Baghdad in February. of establishing “the pipeline in return for a per-
Jordanian firm Burj Al Hayat Transport and centage that will be deducted for each exported
Trading was declared the winner and received a barrel”.™
deal to truck a total of 500,000 tonnes (3.67mn
barrels) of crude from Kirkuk.
Pipeline planning
The deal came as part of broader efforts by Jorda-
nian Prime Minister Omar al Razzaz to increase
trade with Iraq, including the revival of the 1mn
bpd Basra-Aqaba pipeline connecting the neigh-
bouring countries.
In 2016, the original plans for the internal
Iraqi portion of the link to run via Haditha in
the unsettled north-western Anbar province
were revised in light of the invasion by so-called
Islamic State (IS) in favour of a route stretching
first to Najaf and then along the Saudi border and
into Jordan.
In the fourth quarter of that year, expressions
of interest (EoIs) were invited in a contract to

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