BAGHDAD — Ankara and Baghdad are working toward building a new oil pipeline with the capacity to transport one million barrels per day from Iraq's Kirkuk fields to the Turkish border.
"The Iraqi government is now examining tenders for the new oil pipeline between Iraqi and Turkey, after having finished with the engineering and technical studies," Iraqi Ministry of Oil spokesperson Assem Jihad told Al-Monitor recently. He added that construction will probably get underway in 2020.
“Iraqi crude oil exports reached 111.7 million barrels [in August], 3.6 million of which were transferred" via the existing but damaged line from Kirkuk to Turkey's Ceyhan port on the Mediterranean Sea, he said. "The Ministry of Oil is trying to increase oil exported through Mediterranean ports.”
Jihad told Al-Monitor, “Iraq is proceeding with the policy of diversifying export outlets and it is trying to provide all that is necessary to ensure continuous oil flow to global markets, to keep up with the increase in production.” These efforts are especially important as US sanctions have been choking off oil from Iran.
The new pipeline will be the second between the countries. The original, which began operating in 1976, has been repeatedly damaged by fighting. In 2015, operations by the Turkish Kurdistan Workers Party caused losses estimated at $500 million.
The Turkish government had promised to restore the old pipeline, but experts estimated it was so badly damaged that maintenance efforts would be useless. A committee that Turkish President Recep Tayyip Erdogan formed in May recommended building an entirely new line capable of meeting other countries' needs after the loss of Iranian oil.
The new line will connect to Iraq's existing pipeline network. Iraq will be able to export oil from its central and southern fields — not just from Kirkuk in the north — to Turkey and the ports of the Mediterranean Sea. It will give the Iraq National Oil Company flexibility in exporting oil to global markets, even before it could finish a pipeline being considered between Iraq and Syria to the Mediterranean Sea.
Russia is trying to convince the parties concerned to abandon the new pipeline project and complete the pipeline through Syria. However, the security situation is unstable on Syria's borders and the high cost of the project might delay it for several years.
A source well informed about the agreement told Al-Monitor, “The pipeline isn't being established only because the old pipeline was in bad condition. The deal has an important political end to it." The source explained that the Iraqi Kurdistan Regional Government (KRG, based in Erbil) "sometimes exports oil through an old pipeline that passes through its lands without approval from the federal authorities."
The federal government in Baghdad had agreed with the Erbil government that the latter would supply 250,000 oil barrels per day to the national oil company in exchange for KRG salaries paid from the federal budget. However, the Kurdish side reneged on the agreement in consideration of the debt the KRG accumulated after international oil companies left the country once the Islamic State seized Mosul and the Kirkuk-Turkey pipeline was damaged.
The federal Oil Ministry revealed in May that the KRG has been exporting more than 600,000 barrels per day. Parliament member Khaled Jawad confirmed this figure on behalf of parliament's Transparency Committee in a Sept. 4 statement to Al-Maalomah Agency, saying, “The KRG currently exports 461,000 barrels officially per day, in addition to 150,000 barrels that are smuggled to avoid registering them.”
The new pipeline is a vital project for Iraqi oil exportation and promises to compensate for Turkey's loss of Iranian oil. However, disputes remain between Baghdad and Erbil as well as disagreements between Ankara and Baghdad over water.
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