Page 6 - MEOG Week 05 2023

MEOG PIPELINES & TRANSPORT MEOG

Militia threatens

planned Basra-

Aqaba pipeline

IRAQ AN Iraqi militant group with links to Iran this In November 2021, the Ministry of Oil
week made vague threats to halt any effort to (MoO) said that technical and commercial talks
establish a pipeline route linking Basra with the were ongoing but added that the project was
Red Sea. only likely to proceed if costs were reduced sig-
Various versions of plans to build a 1,600-km nificantly, offering a ballpark figure of “less than
conduit to carry crude oil from Iraq’s oil-rich $9bn”.
Basra Governorate to the Red Sea port of Aqaba Last year, Jordan’s Minister of Energy and
have been on the drawing board since 1982, with Mineral Resources, Saleh Kharabsheh, gave
political, technical and commercial concerns a price of $7-9bn. A few months later, MoO
converging to derail progress. spokesman Assem Jihad said that the ministry
However, following meetings held in had received two proposals to finance the project
mid-January in Baghdad between Jordanian at a higher cost, noting an upper limit of $8.5bn.
parliamentary speaker Ahmad Al-Safadi and
his Iraqi counterpart, Muhammad Halbousi, Security concerns
suggested that work would soon begin on the The restive nature of the Anbar Governorate in
cross-border link. Western Iraq is a particularly sizeable challenge
This potential progress appears to have for the project. Parts of the region have slipped in
angered the Harakat Hezbollah al-Nujaba and out of control by ISIS since 2014.
(HHN), which reports to Iran’s elite Quds Force, Companies have previously abandoned bids
part of the Islamic Republic Revolutionary as security concerns in the region mount, despite
Guard Corps (IRGC). large amounts of government resources hav-
Leader of HHN’s political council Ali al-As- ing been assigned towards military campaigns
adi was quoted by local media as saying: “Jor- against the group, and large amounts of territory
danians must know their battle is doomed for having been retaken by the government.
failure. [The Basrah-Aqaba oil pipeline] will Despite government success, the Iraqi oil
never be. Let them try and they shall witness ministry has nevertheless continued to alter the
what happens to them and whoever collaborates route of the pipeline to prevent further investors
with them.” from leaving.
The project will be divided into two parts: the This has added a further 200-300km to the
first phase includes installing a 56-inch (1,422- project. Since these issues and a further wait due
mm), 680-km pipeline with a capacity of 2.25mn to the Covid-19 pandemic, a senior fellow at
barrels per day (bpd) from the Rumaila oilfield the Iraq Energy Institute stated that the project
to Najaf, built in three phases. would most likely be placed “on the back burner.”
The second package covers the installation
of a 42-inch (1,066-mm), 973-km pipeline from Mutual importance
Najaf to the Jordanian border and on to Aqaba Iraq and Jordan have both stated that the project
with a capacity of 1mn bpd. The latter will is of vital strategic importance. It offers Iraq an
include a spur carrying 150,000 bpd to the Jor- alternative to over-reliance on its Gulf oil termi-
dan Petroleum Refinery Co. (JoPetrol) at Zarqa nals while also opening a quicker route to mar-
and covering its full capacity. kets in Europe and the US, and also bypassing
With concerns having previously been raised the Strait of Hormuz.
about the potential for the pipeline’s costs to spi- However, at a time of low oil prices resulting
ral, Halbousi stressed that “the financial cost of in low economic growth and a long conflict with
the Basra-Aqaba pipeline has been reduced”. militants, the Iraqi government is potentially set
Estimates for its construction have come in to suffer revenue shortages, which may hamper
as high as $26bn, based on a $4bn fee to develop the outlook for the pipeline plan.
the Iraqi portion of the line, with the section in Meanwhile, for Jordan, which is reliant on
Jordanian territory costing up to $22bn. A price imports for around 97% of domestic demand,
of $12bn has also been quoted for implementing the project would provide a hard-wired supply
the project, while in 2019, $18bn was talked of as stream, fed directly into its sole refinery, while
the sum for constructing an extended version of pipeline tariffs would provide a steady revenue
the line running to Egypt. for the state.™

P6 www. NEWSBASE .com Week 05 01•February•2023