|Kuwait to import Iraqi gas

Dec 15, 2004 01:00 AM

Kuwait has agreed with Iraq to import up to 200 mm cf (5.6 mm cm) of Iraqi natural gas daily, in a deal eventually worth billions of dollars, a senior official said
A joint economic commission between the two neighbours approved a Memorandum of Understanding (MoU), which is expected to be signed by the two governments soon, Kuwaiti Energy Ministry Undersecretary Issa Al-Oun told after a meeting of the commission.

Oun, who heads the Kuwaiti side in the joint body, said the project, including the building of facilities and rehabilitation of a pipeline that will carry the gas, would cost 240 mm Kuwaiti dinars (about $ 810 mm).
One month after signing the MoU, the two Arab countries will sign a commercial agreement to regulate the imports which are due to start within one year of signing the agreement, Oun said.

In the first phase, Kuwait will import some 35 mm cf (1 mm cm) of Iraqi gas daily in a project estimated to cost $ 27 mm of which the emirate will pay $ 20 mm, the official said.
Details for the second phase will be discussed in a meeting three months from now, Oun said. It is estimated to cost $ 786 mm of which Kuwait will pay $ 440 mm and the rest will be paid by Iraq, he said.

The Iraqi gas will be bought at the market price, Oun said. Kuwait was receiving about 200 mm cfpd of gas from Iraq between 1986 and August 1990, when Iraqi troops invaded the emirate, through a 100 km (60-mile) pipeline which has a capacity of 400 mm cf (about 11 mm cm) daily. There is a second pipeline for condensates.
"The Iraqis are ready to deliver right now... At our end we have no problem," Oun declared.

Kuwait, which is rich in oil but poor in natural gas resources, also agreed to increase its exports of refined products to Iraq to help the war-ravaged country cope with fuel shortages, Oun said. The quantity of petrol will be raised from 2 mm litres (440,000 gallons) daily now to 3 mm litres daily from January 1 for six months, he said.
Kuwait will also export up to 1.5 mm litres (330,000 gallons) of diesel daily in addition to 180,000 tons of LPG daily to Iraq until the end of June next year, Oun said.

The two countries have also agreed in principle to form a joint technical team to "control production" at the oil fields close to the borders which caused disputes between them before and after the invasion.
"We are talking about the pattern of production... how to drill, understanding on the method of production and procedures," Oun said.

The two sides however agreed to suspend studies on the possibility of establishing an oil pipeline to export about 250,000 bpd of Iraqi crude oil through Kuwaiti ports, Oun added.
"We have told the Iraqis that we cannot accommodate their request because Kuwait needs the oil facilities... but we told them we can study their request in future expansion projects," Oun said. Iraq is looking to diversify its oil export outlets especially after attacks by insurgents on the oil infrastructure.

Source: Agence France Presse ||Iran to comply with OPEC's decision to suppress extra output 15-12-04 Iran will comply with the OPEC's decision to suppress extra output and pump crude oil at its official quota.
Ali Majedi, deputy minister of foreign affairs of Iran, said that his country will surely join other OPEC members.

OPEC agreed to remove about 1 mm bpd of crude supply above formal limits from the market, although Iran was exempted from making any cuts as it was already pumping in line with its ceiling.
Iran was producing about 3.98 mm bpd in November. Its official output ceiling is 3.964 mm bpd.

Source: Neftegaz.RU
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