Page 6 - MEOG Week 13 2022

MEOG PIPELINES & TRANSPORT MEOG

Iraq and Jordan extend

crude supply deal

IRAQ/JORDAN THE Jordanian government this week agreed the required logistical preparations. Zawati said
to renew an agreement to import 10,000 barrels that crude flows had stopped after prices fell
per day (bpd) of Kirkuk crude from Iraq after the below $20 per barrel.
previous deal expired in January. The deal was extended in late January 2021
Hassan Hiari, assistant for energy affairs after a meeting between Prime Ministers
at Jordan’s Ministry of Energy and Mineral Mustafa al-Kadhimi and Bisher al-Khasawneh.
Resources (MEMR), said that trucked consign- Jordan reported that flows had averaged 9,899
ments would resume in early April, noting that bpd from September 1, 2021 and January 30 this
the parties had been in dialogue over the exten- year.
sion throughout February.
Under the terms of the pre-existing bilat- Pipeline plans
eral deal that was signed in February 2019, Ties between Amman and Baghdad have
Iraq agreed to cover around 7% of Jordan’s oil strengthened in recent years and in January, the
demand (10,000 bpd), trucking crude from the Iraqi cabinet approved a framework agreement
Baiji refinery to the Jordanian border via Kirkuk, for the development of a major cross-border
then on to the Zarqa refinery near Amman. After pipeline that will transport oil from the oil-rich
lengthy delays, the first batch of Iraqi crude was Basra province to the Jordanian Red Sea port of
trucked from Baiji to Jordan via Kirkuk in Sep- Aqaba.
tember that year. Plans for the project date back to 1983, at
At the time, it was reported that Jordan would which point Jordan asked the US for guaran-
purchase the oil at a $16 per barrel discount to tees that the pipeline would not be targeted by
Brent in order to cover the transport and devia- Israel. In November 2021, Iraq’s Ministry of Oil
tion in specifications, with Iraqi goods exported (MoO) said that technical and commercial talks
through the port of Aqaba receiving preferential remained ongoing but added that the project was
rates in return. only likely to proceed if costs were reduced sig-
However, last year, Alaa al-Yasiri, general nificantly, offering a ballpark figure of “less than
manager of Iraq’s state oil marketer SOMO, told $9bn”. Kharabsheh noted that the latest price
Iraq News Agency (INA): “The Oil Marketing range for the development is $7-9bn.
Company does not have differential prices, but The project is divided into two parts: the first
rather fixed prices according to the market … phase includes installing a 56-inch (1,422-mm),
Jordan stipulated that, according to the Cabinet’s 680-km pipeline with a capacity of 2.25mn bpd
decision, the transportation cost was calculated from the Rumaila oilfield to Najaf, built in three
at $11 from Baiji to Jordan, and this is among the phases. The second package covers the installa-
items of bilateral agreements between the two tion of a 42-inch (1,066-mm), 973-km pipeline
countries, and the supreme interest is valued by from Haditha to the Jordanian border and on to
the country and the government.” Aqaba with a capacity of 1mn bpd. The latter will
With security issues in Iraq leading to a five- include a spur carrying 150,000 bpd to Jordan’s
year hiatus from 2014 to 2019, shipments were sole refinery at Zarqa, which is currently under-
severely affected again in 2020 by the pandemic going an expansion project to increase capacity
and the resultant drop in oil price led to several from 100,000 bpd to 120,000 bpd.
pauses in supplies and no crude at all sent to Jor- Metering stations will be located at Najaf,
dan in August 2020. with at least 10 pumping stations located along
Cargoes resumed in September following a the conduit’s length and two tank farms to be
July agreement between Amman and Baghdad built at Aqaba with a total capacity of 10mn
on the resumption, with Iraq completing all of barrels.™

P6 www. NEWSBASE .com Week 13 30•March•2022