Page 5 - DMEA Week 36

DMEA COMMENTARY DMEA

three countries had proposed a 1,000-MW pro- crude left Baiji for Jordan via Kirkuk in Sep-
ject “to support the exchange of electrical power tember under a deal for 10,000 barrel cargoes to
and take advantage of the different peak times”. arrive daily by truck.
Meanwhile, Egypt’s Minister of Petroleum Tarek From then until April this year, a total of
el Mulla said that his country was keen to estab- 2.44mn barrels of oil were exported to Jordan,
lish a pipeline to transport Iraqi crude oil to with the most recent cargoes being unloaded
Egypt and Jordan. into Jordanian trucks at the border in an effort
With details scarce, it can only be assumed to halt the spread of COVID-19.
that the pipeline under discussion would be an A bilateral deal was signed in February 2019
extension of the planned 1mn bpd Basra-Aqaba and includes that the crude flows cover around
pipeline. 7% of Jordan’s current demand, buying the oil
Preliminary work to develop the $5bn at a $16 per barrel discount to Brent in order to
conduit is thought to be nearing completion, cover the transport and deviation in specifica-
with Iraqi Ministry of Oil (MoO) expected to tions. In return, Iraqi goods exported through
announce contract winners by the end of the the port of Aqaba receive preferential rates.
year. In May, the ministry clarified that the pipe-
line inside Iraq will be installed according to the Syria to the sea
engineering, procurement, construction and To the north, and less appealing, is the idea of
financing contract (EPCF) model, while in Jor- a pipeline route through Syria. Jihad has previ-
dan it will be executed under the build-own-op- ously been quoted as saying that the ministry
erate-transfer (BOOT) system. was considering “the extension of an Iraqi oil
The Jordanian government has also approved pipeline through Syrian territory to the Med-
a deal with the Iraqi federal government to build iterranean Sea, and is in the process of stud-
two oil and gas pipelines connecting the neigh- ying the economic feasibility of the project
bouring countries, Jordanian state-run news and the appropriate geographical and security
agency Petra reported. conditions”.
The project is divided into two phases: the Middle East Oil & Gas (MEOG) under-
first phase includes installing a 700-km pipeline stands that the line in question would be con-
with a capacity of 2.25mn barrels from Rumaila structed along a separate route to the redundant
to Haditha; the second phase includes installing Kirkuk-Banias pipeline.
a 900-km pipeline in Jordan between Haditha Kirkuk-Banias had a nameplate capacity
and Aqaba with a capacity of 1mn barrels. of 300,000 bpd until it was damaged and shut
Total cross-border capacity is expected to be down in 2003. Ambitious efforts were made in
1mn bpd of oil and 258mn cubic feet (7.31mn 2007 and 2010 involving the aforementioned
cubic metres) per day of gas. Stroytrangaz to rehabilitate the line, but nothing
MoO spokesperson Assem Jihad said in mid- has been heard of these plans since.
2019 that “investment offers from international It would be a strange choice for Iraq, which
companies” were under evaluation on the bases is currently walking a tightrope between its reli-
of establishing “the pipeline in return for a per- ance on Iranian gas for its domestic power sector
centage that will be deducted for each exported and Western influence in the Gulf, which it will
barrel”. doubtless hope ensures safe passage of its crude
The route of the pipeline has changed because to international markets.
of unrest in Anbar Province. In November 2019,
Russia’s Stroytransgaz Oil won a 35-year E&P Few options
deal for Block 17, north-west of Samawah, along Aside from the lengthy projects to establish
the route of the pipeline. The deal was notewor- meaningful routes through Jordan and Syria,
thy because of the challenges of operating in the Baghdad has few other options. Speaking in late
area and because the Gazprom subsidiary is a 2015, then oil minister Abdul Mahdi said that
pipeline rather than exploration specialist. the idea of re-opening the Iraq Saudi Arabia
Pipeline (ISAP) was still being considered, but
Resuming imports stressed that it was a matter “governed by poli-
Meanwhile, Jordan will resume importing oil tics and the relations between the two countries
from Iraq this month, according to Bloomberg. primarily.”
The media outlet quoted Hassan Hiari, director Those talks appear to have dried up, but dis-
of the gas and oil department at the Ministry of cussions between Iraq and Saudi Arabia have
Energy and Mineral Resources, as saying that no instead centred on gas and grid connectiv-
shipments were made during August because of ity, with rumours of Saudi Aramco helping to
the coronavirus (COVID-19) pandemic. develop gas reserves in southern and western
In July, Amman and Baghdad came to an Iraq.
agreement on the resumption of oil exports, Meanwhile, cross-border trade has also
with Iraq completing all of the required logis- increased with Kuwait, though in the form of
tical preparations. Jordanian Energy Minister Iraq seeking to import Kuwaiti gas. There has
Hala Zawati told press gathered in Amman that been talk of Iraq increasing its transport capabil-
crude flows had stopped after prices fell below ities through Turkey, but with the Kirkuk-Cey-
$20 per barrel. han line in need of attention, its repair is likely to
After lengthy delays, the first batch of Iraqi be first in line for investment. ™

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