Page 8 - MEOG Week 28

MEOG PiPeLines & transPort MEOG
Jordan and Iraq hold pipeline talks
iraq/Jordan
tHe energy ministers of Jordan and Iraq met in Baghdad last week to discuss long-delayed plans to implement a cross-border crude oil export pipeline.
the $5bn, 1mn barrel per day (bpd) con- duit is aimed at carrying oil produced from the Rumaila oil eld in Iraq’s Basra Governorate to the Jordanian port of Aqaba. e project recently received endorsement from the Iraqi cabinet.
A er meeting with Iraqi deputy Prime Min- ister for energy and Minister of oil thamir Ghadhban, Jordan’s energy Minister Hala Zawati spoke of the importance of the project, noting that an agreement would be signed between the two countries allowing for con- struction of the pipeline to begin.
She also noted that the governments had agreed that Jordan would have the right to buy 150,000 barrels of oil transferred through the pipeline. the original plan for Basra-Aqaba envisaged a conduit running 1,700 km from the main southern oil elds in Basra to Haditha in the restive north-western Anbar province before crossing the border to Aqaba.
An agreement to build the pipeline was origi- nally reached in 2013 but the project was delayed by the di culty of nding investors under the build-own-operate-transfer (Boot) contract model planned for the cross-border stretch. e invasion of so-called Islamic State (IS) in 2014 then made the northernmost Iraqi portion of the route too dangerous to attempt execution.
A revised route via najaf was said to have been settled upon in 2016 and the Ministry of oil (Moo) invited expressions of interest (eoIs) in an ePC contract for the Basra-najaf string but the project has since stalled.
e Jordanian cabinet approved the pipeline in principle in February last year, according to the Petra news agency, but no further informa- tion on route, contract model or nance was provided.
Jordan’s public nances have su ered badly since the cessation of cheap gas imports from egypt in 2011, forcing reversion to costly imports of liquid fuel to re power stations. is situation was eased in January, though, as Cairo resumed exports said by the two governments to be su - cient to cover around 50% of Jordanian electric- ity generation requirements. e proposed Iraq pipeline would include a spur carrying 150,000 bpd to Jordan’s re nery at Zarqa, which is in the process of a much-delayed expansion.
Local firm Burj Al Hayat transport and trading won a tender from Jordan’s Ministry
of energy and Mineral Resoures (MeMR) to truck a total of 500,000 tonnes (3.67mn barrels) of crude from Baiji in central Iraq, with cargoes of 10,000 bpd arriving daily, beginning early this month.
the Jordan times quoted Burj Al Hayat owner nael iabat as saying that all of the nan- cial and technical elements of the deal had been concluded, with 600 visas having been obtained for the 300 Jordanian and 300 Iraqi drivers that will be trucking the cargoes. iabat added that more would be applied for in the future.
e Jordan Petroleum Re nery Co. (JPRC) has a processing capacity of 100,000 bpd, with crude mostly sourced from Saudi Arabia. Amman currently imports around 98% of its energy needs and consumes 134,000 bpd of oil.
A $1.6bn expansion project to add another 20,000 bpd to capacity (mostly diesel) remains ongoing, with JPRC most recently awarding a contract to US engineering rm KBR for the design of a new residue hydro-processing unit.
MeMR oated the crude transport tender in March following the signing of a memorandum of understanding (MoU) between Amman and Baghdad in February.
e bilateral deal stipulated that the ows would cover around 7% of the Hashemite King- dom’s current demand, buying the oil at a $16 per barrel discount to Brent in order to cover the transport and deviation in speci cations. In return, Iraqi goods exported through Aqaba will receive preferential rates. e leaders also agreed that Jordan would begin supplying electricity to its neighbour, which lacks su cient power gen- eration capacity to meet fast-growing domestic demand, “within two years”.
Meanwhile this week, Reuters quoted Iraqi o cials as saying that the country’s exports via southern ports had reached 3.42mn bpd so far in July, having fallen to 3.39mn bpd in June, which the o cials said had come about because of repairs to an o shore pipeline.™
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w w w . N E W S B A S E . c o m Week 28 16•July•2019