Saudi technical team to study feasibility of restoring Tapline

Mar 07, 2002 01:00 AM

A Saudi technical team will prepare a report by the end of the year on the possible restoration of Tapline, a pipeline linking oil fields in eastern Saudi Arabia with Mafraq, unused since the Gulf War in early 1990s. The team, representing Aramco, the Arab-American oil company, will test the pipeline and study the cost of renovation and maintenance, Minister of Energy and Mineral Resources, Mohmmad Batayneh said.
The minister said that Tapline used to supply Jordan with around 65,000 bpd of oil before it was closed in 1990. The daily maximum capacity of the pipeline is around 350,000 barrels. It was originally constructed in the 1940s to export Saudi oil to the West (via Jordan to the port of Haifa, then part of Palestine, now a major Israeli port city).

Following the establishment of Israel in 1948, Tapline's terminal was diverted from Haifa to Sidon in Lebanon. Tapline continued supplying oil to Jordan until Saudi Arabia cut off its oil supply to Amman in 1990.
The official reason given at the time was Jordan's unpaid bills, but the move was generally seen as linked to Jordan's position during the Gulf War. Since early 1990s, and with UN permission, Jordan has depended totally on Iraq for its oil supplies -- around 85,000 bpd. Late last year, Jordan and Iraq renewed the oil protocol under which Baghdad meets the Kingdom's needs in crude oil and its derivatives, estimated at over 5 mm tons in 2002.

Iraq sells the Kingdom oil at preferential prices which are below market rates. However, if Tapline is reopened, Saudi Arabia is expected to charge international market prices, according to a ministry source. Late last year, Jordan floated a tender for the construction of a multimillion dollar pipeline linking the Haditha area, 260 km northwest of Baghdad, to the Kingdom's refinery in Zarqa,
"The pipeline is expected to save around $ 20 mm in annual land transport costs, currently estimated between $ 55-60 mm," said the minister.

Source: Jordan Times
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