Iraq and Jordan sign oil pipeline deal

Apr 09, 2013 12:00 AM

The Iraqi ministry of oil said that Jordan and Iraq have signed an agreement to build a double pipeline that will supply the Kingdom with crude oil and natural gas.
“The Iraqi oil minister has signed the agreement in Baghdad and the deal was sent to and signed by the Jordanian energy minister on Sunday,” Nihad Mossa, director general of State Company for Oil Projects at the ministry of oil of Iraq, told. “We will immediately undertake all procedures to begin the implementation of this strategic project,” Mossa added, emphasising that the Iraqi government is keen to proceed with the plan.

Prime Minister Abdullah Ensour on Monday met with Iraqi oil ministry officials, including Mossa, to discuss with her preparations to start the implementation of the project. 
Thamer Ghadban, chief adviser to Iraqi Prime Minister Nouri Al Maliki and former oil minister, said that Jordan is the “nearest” country to Iraq, which is looking forward to enhance its relationship with neighbouring countries, he said. Ghadban added that Iraq has now a new vision to separate the political situation in the region from its economic plans, under which Baghdad is seeking to promote its oil, especially as Iraq is considered OPEC’s second exporting member.

Ensour highlighted investment opportunities in the Kingdom, noting that Jordan enjoys stability, security and human resources, but lacks the needed capital due to its scarce natural resources. 
The 1,680-kilometre double pipeline will pump one-million barrels of oil a day from Basra on the Arabian Gulf to Jordan’s Aqaba Port, and around 258 million cubic feet of gas. Some 150,000 barrels of the oil from Iraq is needed to meet Jordan’s needs. The rest will be exported through Aqaba, generating an estimated $3 billion a year in revenues to the Kingdom.

Approximately 100 million cubic feet of natural gas will fulfil Jordan’s gas requirements. The excess gas will be used in pumping stations along the double pipeline.
Regarding the financing of the project, the pipeline from Basra to Haditha in Iraq will be built at the expense of the Iraqi government on the basis of the “engineering, procurement and construction” principle. The pipeline from Haditha to Aqaba will be built on the “build, operate, transfer” basis.

“This week we will invite selected companies to bid for the pipeline from Basra to Haditha and by the year-end we expect the designs to be ready for this part in order to proceed with the process,” Mossa said.
In the first quarter of 2014, a tender will be floated to build the pipeline from Haditha to Aqaba, Mossa said. The $18 billion pipeline project, which includes extending a sub-line to Jordan’s sole refinery in Zarqa, will be operational by the end of 2017, according to Iraqi officials.

The project, which will create about 10,000 jobs in Iraq and Jordan, seeks to increase Basra’s oil exports as the area production of oil is expected to reach 17 million barrels per day in 2017, according to Iraq’s ministry of oil.
The Jordanian side has already signed the deal after receiving a copy from Iraq and concerned officials will soon hold a press conference to announce the development. Jordan receives currently 15,000 barrels of Iraqi oil via land transport, with plans to double the quantity.

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