Genel Energy drops Kurdish export pipeline plan

11 September 2012

New pipeline will handle 1 million barrels a day

UK-Turkish oil firm, Genel Energy has dropped plans to build a 423,000 barrel a day (b/d) crude oil export pipeline from the Taq Taq field in the Kurdistan Region of northern Iraq in favour of a larger two phase pipeline plan.

The pipeline has been replaced by a larger 1 million b/d pipeline, which will run from the company’s producing fields to the Turkish border, according to a company report.

The first phase of the development is the construction of a 20-inch pipeline from the Taq Taq field to Khurmala Dome, the northern formation of the Kirkuk field. The pipeline is being built by KAR Group, a local privately owned Kurdish firm, which also operates the Khurmala Dome.

Currently around 50 per cent complete, the pipeline will eventually give Genel access to Erbil refinery and the existing Iraq-Turkey export pipeline infrastructure.

Mechanical completion is expected by the end of September, with operation planned before the end of the year. The initial capacity of 150,000 b/d will be increased to 200,000 b/d with the addition of new pumps at a later stage.

The second phase of the export plan involves the construction of a 1 million b/d pipeline from Khurmala to the Feysh Khabour pumping station on the Iraq-Turkey border by the end of 2013.

“As a consequence of the construction of the pipeline, Genel Energy will not be pursuing its previously announced plans to develop the Kurdistan Iraq Crude Export (KICE) pipeline”, says the report.

The proposed 24-inch KICE pipeline was intended to run 255-kilometres from Taq Taq to Feysh Khabour. The pipeline’s design was completed by Australia’s OSD Pipelines in the third quarter of 2011 and was planned to be commissioned and operational by the end of 2013.

Seven firms bid in mid-February 2012 for the pipeline’s engineering, procurement and construction (EPC) contract, worth an estimated $400m.  However, no contract was awarded.

The semi-autonomous Kurdistan Regional Government (KRG) is locked in a longstanding dispute over the export of crude oil with the federal government in Baghdad.

Current exports are plumbed into the main Iraq-Turkey pipeline, making production increases from the Kurdish fields difficult. But the KRG plans to build a series of pipelines to transport more oil up to the main export terminal at Fish Khabour, by the Turkish border, increasing the region’s options for exporting its own crude independently of State Oil Marketing Organisation (Somo) and Baghdad.

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