Page 4 - MEOG Week 36

MEOG COMMENTARY MEOG

Iraq export expansion

focuses on Jordan

Iraq remains heavily reliant on its southern export terminals

despite years of talk about expanding routes to the south and west

IRAQ IRAQ last week announced that its oil exports governments of Egypt, Iraq and Jordan saw the
had fallen to a five-year low in August as Bagh- administrations agree to co-operate on intercon-
dad seeks to comply with OPEC+ output nectivity in the fields of oil and electricity as well
WHAT: reductions. as education, agricultural greenhouses and seed
Iraq’s Gulf terminals Total Iraqi exports were 3.02mn barrels per production.
are responsible for the day for the month, with 2.597mn bpd coming Following the meetings in Amman, Egyptian
vast majority of the from federally controlled areas and the remain- Minister of Electricity Mohamed Shaker that the
country’s exports, with ing 423,000 bpd from the Kurdistan Region of three countries had proposed a 1,000-MW pro-
86% of August shipments northern Iraq, according to shipping data cited ject “to support the exchange of electrical power
exported that way. by S&P Platts. and take advantage of the different peak times”.
This marks a 216,000 bpd reduction on July Meanwhile, Egypt’s Minister of Petroleum Tarek
WHY: exports, following Baghdad’s agreement to el Mulla said that his country was keen to estab-
Trucked cargoes to make extra compensatory production cuts in lish a pipeline to transport Iraqi crude oil to
Jordan dried up this year August and September to make up for its his- Egypt and Jordan.
amid a massive price toric non-compliance. Production data is yet to With details scarce, it can only be assumed
drop and then pandemic- be published, though Iraq’s quota for May, June that the pipeline under discussion would be an
related issues. and July was 3.592mn bpd, rising to 3.804mn extension of the planned 1mn bpd Basra-Aqaba
from August until the end of 2020. pipeline.
WHAT NEXT: According to the data, Baghdad-controlled Preliminary work to develop the $5bn
Talks continue about a exports comprised 2.5mn bpd through termi- conduit is thought to be nearing completion,
major planned pipeline nals on the Gulf coast, with 97,000 bpd from the with Iraqi Ministry of Oil (MoO) expected to
to Jordan, with Egypt Kirkuk fields flowing by pipeline to the Turkish announce contract winners by the end of the
recently signing up to port of Ceyhan. year. In May, the ministry clarified that the pipe-
expand the conduit into Iraq has over the past decade sought to ease line inside Iraq will be installed according to the
its territory. its dependence on Gulf export infrastructure. engineering, procurement, construction and
Exports to the north-west are piped via the financing contract (EPCF) model, while in Jor-
Kirkuk-Ceyhan Pipeline, which is often also dan it will be executed under the build-own-op-
referred to as the Iraq-Turkey Pipeline (ITP). erate-transfer (BOOT) system.
This consists of two strings, which originally had The Jordanian government has also approved
a combined nameplate capacity of 1.6mn bpd, a deal with the Iraqi federal government to build
with the wider, 46-inch (1,168-mm) pipe capable two oil and gas pipelines connecting the neigh-
of carrying 1.1mn bpd and the narrower 40-inch bouring countries, Jordanian state-run news
(1,016-mm) line 500,000 bpd. agency Petra reported.
However, following years of sabotage and The project is divided into two phases: the
disrepair, Kirkuk-Ceyhan is rarely capable of first phase includes installing a 700-km pipeline
achieving anywhere near 500,000 bpd in total. with a capacity of 2.25mn barrels from Rumaila
There is also an Erbil-controlled pipeline, to Haditha; the second phase includes installing
which runs from the Taq Taq field via Khurmala a 900-km pipeline in Jordan between Haditha
and connects to Kirkuk-Ceyhan at the metering and Aqaba with a capacity of 1mn barrels.
station in the border town of Fishkhabur. This Total cross-border capacity is expected to be
line was designed to carry 700,000 bpd, but 1mn bpd of oil and 258mn cubic feet (7.31mn
Federal Iraqi oil would need to be put under the cubic metres) per day of gas.
control of the Kurdistan Regional Government MoO spokesperson Assem Jihad said in mid-
(KRG) to make use of the conduit. 2019 that “investment offers from international
The idea of piping crude through other companies” were under evaluation on the bases
neighbouring countries has also been mooted at of establishing “the pipeline in return for a per-
various times, with lengthy discussions having centage that will be deducted for each exported
proved largely fruitless so far. barrel”.
The route of the pipeline has changed because
Jordan in the middle of unrest in Anbar Province. In November 2019,
The recent tripartite summit between the Russia’s Stroytransgaz Oil won a 35-year E&P

P4 www. NEWSBASE .com Week 36 09•September•2020