Pipeline gives Kurds an outlet

25 April 2013

Establishing a crude pipeline with Turkey will free Kurdistan region from Baghdad’s influence

By early 2014, the Kurdistan Regional Government (KRG) of northern Iraq may have its first independent route to export crude oil out of the country. It has previously had to rely on permission from Baghdad to ship its oil, but since January it has been sending hundreds of trucks across its border with Turkey carrying oil.

The region is currently transporting between 10,000 and 20,000 barrels a day (b/d) of crude. This may not sound like much, but considering a single road tanker can only hold about 200 barrels, it will require at least 50-100 tankers each day, an enormous logistical undertaking.

But it is not without reward. On 16 April, UK/Turkish Genel Energy announced its first lifting of its crude from the Taq Taq field from the Turkish Mediterranean port of Mersin. Operators in the Kurdistan region have also previously complained about payment delays due to the continued disagreement between Erbil and Baghdad over who should pay contractors.

They now have a temporary solution. Genel is paid by the KRG, which in turn receives refined products, such as gasoline, from Turkey.

Exporting by truck, however, is only the beginning. If Genel can meet its ambition of ramping up production to 200,000 b/d in 2014, it will need a lot more than just trucks to export what it cannot sell within the region. A viable pipeline across the border, or tying directly into the existing Iraq-Turkey pipeline will be crucial to any expansion plans.

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