Iraq to Build Basra-Aqaba Oil Pipeline

Iraqi oil ministry announced that it is planning to complete a pipeline to carry Iraqi oil to Jordan and Egypt through the Gulf of Aqaba, ministry spokesman Assem Jihad said today. Iraq has already constructed a pipeline from the oilfields of Basra to Haditha region near the Jordanian border. That pipeline is to be extended from Haditha to the Jordanian port of Aqaba. The proposed pipeline will have a capacity of one million barrels per day. A parallel gas pipeline will also be built.

Egyptian Prime Minister Hesham Kandil discussed supplying Iraqi oil to the Egyptian refineries with his Iraqi counterpart Nouri al-Maliki during a recent visit to Baghdad.

“We discussed supplying the Egyptian refineries with crude via a pipeline across the Gulf of Aqaba, which is considered a vital route to bolster the Iraqi, Egyptian and Jordanian economy,” said Maliki in a statement. (Aswat al-Iraq/Al Monitor, 13 March)

During to a visit to Jordan last year, Maliki concluded an agreement with the kingdom to extend a pipeline from Iraq to the Port of Aqaba. The pipeline would supply all Jordanian oil import needs.

File photo: Iraq's Prime Minister Nouri al-Maliki (R) speaks and Egypt's Prime Minister Hesham Kandil. Baghdad, March 4, 2013 (Reuters)

Iran Announces Oil Pipeline Deal with S. Korea

The National Iranian Oil Company (NIOC) announced today that it has signed a 3.5 billion dollar deal with an unnamed South Korean company to construct a 1,680km oil pipeline linking Iran’s Caspian Sea port of Neka to Jask, an Iranian port in the Sea of Oman. The pipeline would facilitate oil swap between Iran and the oil-rich Caspian Sea littoral states. No dates for the start or completion of the project were released [Mehr News Agency, 7 October].

Iran is planning to raise the volume of oil swapping with the Caspian countries from the present 25,000 barrels per day to 200,000 bbp by the end of current Iranian calendar year (March 2012), and with the new pipeline it can substantially increase that volume. The Central Asian countries would benefit from the deal by selling oil at Jask.

Iran Oil Fire Extinguished

Firefighters have extinguished a massive fire that raged for more than ten hours after a major oil pipeline exploded in Iran's southwestern province of Khuzestan, Iran’s official news agency IRNA reported. The explosion occurred at 1:30 AM local time on Friday near the town of Qale Naar at Qala Naar-Ahvaz pipeline. The 20-inch pipeline carries 4,000 barrels a day.

“The production of oil in the southern area is still continuing at full capacity and the oil output from the wells is being transferred to other pipelines,” Hormoz Qalavand, Executive Director of the National Iranian South Oil Company, said [IRNA, 5 August].

Brent oil futures prices jumped on the news of the explosion, and pared some of the increases after Qalavant’s statement. Traders cited fears of terrorism in a major OPEC producer.

Kazakhstan-Caspian Oil Pipeline

Azerbaijan's state oil company SOCAR and Kazakhstan's state monopoly KazMunaiGaz have signed an agreement to transfer Kazak oil across the Caspian Sea for entry into the Baku-Tbilisi-Ceyhan (BTC) pipeline and subsequent re-export to world markets.

The Kazakhstan-Caspian Transportation System (KCTS), as the new pipeline would be called, is to enable Kazakhstan to finally double its oil export capacity, a goal that has for long eluded it. KCTS is expected to handle 500,000 bpd by 2012, rising to 750,000 bpd later.

KCTS would also be a response to Russia’s unwillingness or inability to implement long-discussed Caspian Pipeline Consortium (CPC) line. The CPC line takes oil from the Tengiz deposit in northwest Kazakhstan across southern Russia to the port of Novorossiisk on the Black Sea.

New Oil Pipeline To Detour Hormuz

Trans-Arabia Pipeline

DEBKA-Net Weekly reports that Saudi Arabia, Bahrain, UAE, Oman and Yemen have launched a vast Trans-Arabia Oil Pipeline project. The overland pipeline will bypass the Straits of Hormuz, ending Iran’s strategic control of the Persian Gulf waterways.

The first stage of the Trans-Arabia pipeline will link Saudi Aramco oil terminal at Ras Tannura on Persian Gulf, Yemen’s Mukallah oil port on Gulf of Aden, UAE port of Al Fujairah on Arabian Sea, Oman’s port of Muscat, and Saudi Red Sea port of Yanbu. The construction will start in November 2007. Saudi Arabia and other participating members of the Gulf Cooperation Council (GCC) will provide the $6 billion investment required to complete the first stage.

Saudi Arabia will provide a new 35,000-strong security force to protect the pipeline against terrorist and foreign attacks. The first 5,000 recruits are reportedly in training.

DEBKA-Net Weekly reports that in the second stage, the Trans-Arabia pipeline will carry South Iraqi oil crossing the Iraqi desert directly into Saudi Arabia, bypassing Shatt Al-Arab. The construction of this stage will start in early 2009. Iran, on its part, has started negotiations with the current Iraqi government to build a pipeline that would carry 200,000 barrels a day of Iraqi crude refineries in Iran.

DEBKA-Net Weekly reports that Kuwait and Qatar are the two GCC members that will not participate in the project. Both countries are involved in building a gas pipeline network which has highest priority for them.

The five pipeline branches are planned as follow:

Pipeline #1: Ras Tannuna on Saudi eastern coast to Al Fujairah in UAE, also collecting crude from Abu Dhabi’s Habashan oil fields. The work will start in November. It will be a 48-inch pipeline running for 350 kilometer with a capacity of 1.5 million bpd.
Pipeline #2: Linking Ras Tannuna to Muscat, Oman.
Pipeline #3: Linking Ras Tannuna through Hadhramouth fields and onto Mukalla port in Yemen’s Gulf of Aden.
Pipeline #4: Linking Ras Tannuna-UAE pipeline onto Mukalla port in Yemen.
Pipeline #5: Linking Ras Tannuna to Saudi’s Red Sea port of Yanbu. This line will bypass two older ones in the same area.

For security reasons, large sections of the pipeline will be built underground. The participating countries will also add 4 million bpd to their total crude production.

IPI Pipeline's Uncertain Future

Asia Times reported today that that the trip of Indian premier Manmohan Singh and Pakistani president Pervez Musharraf to Tehran to sign Iran-Pakistan-India (IPI) gas pipeline has been put on hold. The $7.5 billion IPI pipeline was to export natural gas from Iran to Pakistan and India.

There are growing speculations that the ousting last week of Iranian oil minister Kazem Vaziri Mahaneh was due to strong internal opposition to his handling of the IPI project. Mahaneh had offered India and Pakistan a deep discount on gas exports, reportedly at 30% discount rate.

Iran oil analysts believe such major discount was misplaced as Iran would need most of its natural gas export quota to be pumped into the existing oil wells to stop their rapidly diminishing rate of production, considered to be as high as 8% annually. In the absence of any foreign investment to bring new oil fields online, such diminishing rate of production would wipe out all Iran’s oil exports in less than a decade.

Iran submitted a new market-based variable pricing proposal that has been rejected by India. Washington was also unhappy about any strategic partnership between Iran and India on energy. The future of IPI pipeline project now looks uncertain.