Page 6 - DMEA Week 02 2022

DMEA COMMENTARY DMEA

Iraq approves

Jordan pipeline plan

as it seeks outlets

As Iraq pushes forward with its production capacity plans, Baghdad
is redoubling long-delayed efforts to expand its routes to market.

MIDDLE EAST AN intergovernmental breakthrough appears an extended version of the line running to Egypt.
to have been made that lays the foundations for The ministers discussed building at the fourth
work to finally begin on the development of a trilateral Jordanian-Iraqi-Egyptian summit that
WHAT: new route to market for Iraq as Baghdad seeks was held in June in Baghdad with the partici-
Iraq and Jordan have to hike its oil export capacity. pation of King Abdullah, Iraqi Prime Minister
agreed the framework Long reliant on ageing infrastructure to sell Mustafa Kadhimi and Egyptian President Abdel
for the development of a crude to global consumers, efforts to increase Fattah Al Sisi.
long-awaited crude oil both sea and piped exports have been hampered
pipeline to the Red Sea. in recent years by attacks and disrepair. Pipeline detail
An agreement for the conduit, known as the
WHY: Jordan outlet Basra-Aqaba pipeline, was originally signed in
As Baghdad increases oil The Iraqi cabinet has approved the framework 2013 on a line that would transport 1mn barrels
production capabilities, agreement for the development of a major per day (bpd) of crude from Iraq’s oil-rich Basra
it is seeking to raise cross-border pipeline that will transport oil from Governorate to the Jordanian port of Aqaba via
its export options with the oil-rich Basra province to the Jordanian Red Haditha.
some facilities having Sea port of Aqaba. The project is divided into two parts: the first
lain unused because of The announcement was made by Jordan’s phase includes installing a 56-inch (1,422-mm),
attacks or disrepair. Minister of Energy and Mineral Resources, Saleh 680-km pipeline with a capacity of 2.25mn bpd
Kharabsheh, following a call with his Iraqi coun- from the Rumaila oilfield to Najaf, built in three
WHAT NEXT: terpart, Ihsan Abdul Jabbar. phases. The second package covers the installa-
Iraq is also working to During the call, the Iraqi minister said he tion of a 42-inch (1,066-mm), 973-km pipeline
overhaul its southern oil had been instructed to complete the procedures from Haditha to the Jordanian border and on to
export terminals as part necessary for the agreement between the gov- Aqaba with a capacity of 1mn bpd.
of efforts to nearly double ernments to be signed. The latter will include a spur carrying 150,000
loading capacity. Kharabsheh and Abdul Jabbar agreed to bpd to Jordan’s sole refinery at Zarqa which is
mobilise technical and legal teams to prepare currently undergoing an expansion project to
the required documentation. expand capacity from 100,000 bpd to 120,000
Plans for the project date back to 1983, at bpd.
which point Jordan asked the US for guarantees Metering stations will be located at Najaf,
that the pipeline would not be targeted by Israel. with at least 10 pumping stations sited along the
In November 2021, Iraq’s Ministry of Oil conduit’s length and two tank farms to be built
(MoO) said that technical and commercial talks at Aqaba with a total capacity of 10mn barrels.
remained ongoing, but added that the project With a gas line also planned to be built along
was only likely to proceed if costs were reduced the same route, total cross-border capacity is
significantly, offering a ballpark figure of “less anticipated to be 1mn bpd of oil and 258mn
than $9bn”. Kharabsheh noted that the latest cubic feet (7.3mn cubic metres) per day of gas.
price range for the development is $7-9bn. Following a 2019 prequalification of firms
However, estimates for the pipeline’s con- interested in bidding for work on the pipeline,
struction having been as high as $26bn based on Iraq’s Ambassador to Jordan Haidar Al-Athari
a $4bn fee to develop the Iraqi portion of the line, told the Iraqi News Agency (INA) in September
with the section in Jordanian territory costing up last year: “The government has received bids
to $22bn. A price of $12bn has also been quoted from a number of global companies to build
for implementing the project, while in 2019, the pipeline that will transport Iraqi crude to
$18bn was talked of as the sum for constructing Jordan.”

P6 www. NEWSBASE .com Week 02 13•January•2022