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Iraq in talks to build crude storage

in China, Pakistan

IRAQ IRAQI Oil Minister Ihsan Abdul Jabbar this bpd), the sources said. Basrah Medium has an
week said that the country was in advanced dis- API gravity of 27-29.
The move is seen as cussions with Chinese NOCs to build oil storage
an important step facilities in the Middle Eastern country as it seeks Access to Asia
in increasing Iraq’s to increase sales in the region. Storing oil in Asia has been popular among Gulf
flexibility of supply to Speaking to Reuters, Abdul Jabbar said that state oil firms, particularly Abu Dhabi National
key Asian markets and while the talks had reached an advanced stage Oil Co. (ADNOC). The company has had an
to developing its trading with the Chinese entities, Baghdad is also “dis- agreement to store up to 6.29mn barrels at the
capabilities. cussing plans proposed by Pakistan for building Kiire oil terminal in southern Japan in place
crude oil storage facilities” there. He added that since 2009. It also agreed terms with Japan’s
there were plans to build storage capacity else- Agency for Natural Resources and Energy to
where in Asia to “serve Iraq’s interests in mar- store more than 8mn barrels of ADNOC crude,
keting its oil.” Pakistan is seen as a key growth expanding and extending a deal that had lapsed
market for Basrah crude grades. a year earlier.
Meanwhile, he told Shafaq News Agency that Meanwhile, a memorandum of understand-
serious discussions were ongoing “with a Chi- ing (MoU) was signed in November 2019 with
nese private company and other Chinese govern- Indian Strategic Petroleum Reserves Ltd (ISPRL)
ment companies over building jointly managed to consider taking space in the new Padur cavern
oil depots.” in the southern state of Karnataka. ISPRL com-
Currently, around 70% of Iraq’s crude exports pleted the process of filling a 5.86mn barrel allo-
are sold to Asian countries, with China and India cation at the nearby Mangalore facility during
accounting for a combined 90% of this figure. the same month.
The move is seen as an important step in In October 2020, the Indian Cabinet gave
increasing Iraq’s flexibility of supply to key Asian permission for ADNOC to export crude it
markets and to developing its trading capabili- has sitting in storage held by Indian Strategic
ties, particularly as it spreads exports across its Petroleum Reserves Ltd. (ISPRL). The reserve
Basrah Heavy, Light and new Medium crude has a current crude storage capacity of 4.55mn
grades. Sources from the country’s state oil mar- tonnes (33.4mn barrels) and is full. Meanwhile,
keter SOMO were quoted by S&P Global Platts the commercial quantity – the volume availa-
last week as saying that January exports of Bas- ble for marketing by ADNOC – was recently
rah Medium equated to 891,000 barrels per day increased from 35% to 50%. India sees this
(bpd) in January following its launch, amounting as an opportunity to turn the country into a
to around 32% of the total. hub for re-export, while ADNOC has around
Meanwhile, Basrah Light accounted for 40% 17mn barrels available for sale from strategic
(1.1mn bpd) and Basrah Heavy 28% (782,000 locations in India. ™

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