EXCLUSIVE: Iraq prioritises Aqaba export pipeline

20 May 2018
Officials say the planned route is crucial amid escalating regional tensions

Iraq’s Oil Ministry is prioritising the project to build an oil export pipeline to the port of Aqaba in Jordan amid escalating regional tensions, according to industry sources.

“This has become a key project for the oil ministry,” said one source.

“Officials are going to do everything they can do to make sure this project progresses smoothly.”

The source added: “The election results have increased uncertainty about all projects. It’s impossible to guess exactly how things will change, but this project should still be prioritised.”

The added political pressure to complete the pipeline comes amid increasingly difficult relations between Iraq and neighbouring countries.

In March, Turkey’s President Tayyip Erdogan said Turkish forces had started operations in Iraq’s Sinjar region to try to crack down on Kurdish militants, despite Iraq’s Joint Operations Command saying there is no reason for troops to “cross the Iraqi border into those areas”.

While relations between Baghdad and Turkey remain cordial, tensions could well ramp up over coming months if incursions continue.

Baghdad's difficult relationship with the semi-autonomous northern region of Kurdistan has meant that it has been unable to export crude from Kirkuk to the port of Ceyhan in Turkey over recent months.

The Kirkuk-Ceyhan pipeline can transport 150,000 barrels a day (b/d) and is controlled by the Kurdistan Regional Government (KRG).

Iraq’s dealings with Iran, another potential recipient of crude exports, are also likely to be complicated by the return of US sanctions.

On 8 May, US President Donald Trump announced that he was going to withdraw from the 2015 nuclear deal and resume sanctions on Iran.

The oil-focused sanctions are due to snap back into place on 4 November.

The pipeline to Jordan’s Aqaba is expected to extend from an energy station in the Iraqi governorate of Najaf, a distance of 350km.

Originally it was due to be constructed as a twin pipeline, with parallel pipes carrying oil and gas separately.

Now it is thought that the oil pipeline will be build first, with the gas pipeline added at a later phase.

The scope of the project is also expected to include pump stations.

The contract is expected to use the build-operate-transfer (BOT) model and is estimated to be worth $3bn.

The Najaf-Aqaba pipeline project, which has seen significant delays in the past, was approved by Jordan’s cabinet in February.

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