Page 6 - MEOG Week 23 2022

MEOG PRICES & PERFORMANCE MEOG

Jordan provides updates on

Basra-Aqaba pipeline prep

JORDAN/IRAQ JORDAN’S Minister of Foreign Affairs Ayman changes made to the plans had necessitated an
Safadi said this week that preparations for the update of the 2020 feasibility study, with Burley
development of an oil export pipeline connect- Co. appointed to carry out work aimed at con-
ing Iraq’s Basra Governorate to the Red Sea port trolling costs.
of Aqaba have reached 80%. Cost has been a major issue for the project,
Speaking during a tripartite meeting in Bagh- with estimates for its construction coming in
dad with his Iraqi and Egyptian counterparts – as high as $26bn based on a $4bn fee to develop
Fuad Hussein and Sameh Shoukry – Safadi said: the Iraqi portion of the line, with the section in
“This project has a positive impact on Iraq, Jor- Jordanian territory costing up to $22bn. A price
dan and also on Egypt, because the vision is to of $12bn has also been quoted for implementing
complete the pipeline towards Egypt.” the project, while in 2019, $18bn was talked of as
He added: “This is a huge project and needs the sum for constructing an extended version of
a lot of studies. According to our joint evalua- the line running to Egypt.
tion, 80 percent of the required preparations to In November 2021, the Ministry of Oil
launch this project have completed, and we are (MoO) said that technical and commercial talks
now waiting for the last steps.” were ongoing, but added that the project was
Talks around the Basra-Aqaba pipeline con- only likely to proceed if costs were reduced sig-
necting the oil-rich south-east of Iraq with Jor- nificantly, offering a ballpark figure of “less than
dan and its Red Sea Coast have been intermittent $9bn”. In February, Kharabsheh noted that the
since the line was first proposed in 1982. latest price range for the development is $7-9bn.
Tangible progress appeared to be nearing MoO spokesman Assem Jihad told Al-Ira-
when in January Jordan’s Minister of Energy and qiya News in April that the MoO had received
Mineral Resources, Saleh Kharabsheh, said that two proposals to finance the project at a cost of
a framework agreement had been approved by more than $8bn. He said: “The ministry is seek-
the Iraqi cabinet for a 1mn barrel per day (bpd) ing to attract an offer to implement the pipeline
conduit running from Basra to Aqaba via Hadi- through a company or a coalition of companies
tha in Iraq’s Anbar Governorate. However, in that it is establishing at its expense and agreeing
April, Iraqi authorities suggested that progress to deduct investment expenses over several years
should not be anticipated until a new govern- because the costs are great.”
ment is in place. Jihad added: “There is also an idea that gov-
On April 18, Iraqi Oil Minister Ihsan Abdul ernment funding will be at a cost of no more
Jabbar announced that various changes were than $8.5bn […] the project was transferred
being made to the project to ensure that it ‘meets to the next government because transferring it
the requirements and benefits of the country’. from investment to funding requires presenting
“The Basra-Aqaba line project has not been realistic studies for implementation.”
signed, the memorandum of understanding While Iraq appears no closer to forming a
[MoU] has not been signed, and it has not been new government, Safadi said this week: “The
referred” for implementation, he said. principle and the studies that prove the project
Abdul Jabbar noted that it had been neces- is beneficial have been agreed upon. We iden-
sary to submit plans to the Council of Ministers tified all the sectors in which we will co-op-
several times to fulfil procedures relating to its erate, and there are opportunities for a fast
financial structure as well as seeking approval progress in terms of transportation and electric-
from the Ministry of Planning. Meanwhile, ity interconnection.”™

P6 www. NEWSBASE .com Week 23 08•June•2022