Syria is in talks with Italy’s Saipem for a proposed deal to build crude oil and natural gas pipelines linking Syria and Iraq.

Syrian prime minister, Mohammad Naji Otri met with Saipem’s chairman, Pietro Franco Tali on 24 May for talks on cooperation in the oil and gas sector, state-run Syrian Arab News Agency (Sana) reports.

Syria plans to build a pipeline, which would join Iraq’s oil export infrastructure and would see crude oil transported from the southern oil fields of Basrah to the Syrian port of Baniyas. Damascus also plans to build a gas pipeline between the two countries.

The talks were also attended by the minister of petroleum and mineral resources Sufian Alao and Saipem’s executive director Pietro Varone. According to Middle East projects tracker, despite being involved in an estimated $118bn-worth of projects across the region’s energy sector, the pipeline deal would be a first for the Italian engineering firm in Syria.

Syria has proven oil reserves of 2.5 billion barrels, but production has been in steady decline over the last decade, falling from 576,000 b/d in 1998 to 398,000 b/d in 2008. UK energy consultants KBC forecast this figure will fall to around 305,000 b/d by 2020. State-run Syrian Petroleum Company (SPC) is responsible for less than half of the country’s output. The rest is produced by joint venture companies (MEED 4:7:08)

The Arab Republic requires some 6 billion cubic metres (bcm) a year of natural gas, a figure which is expected to rise to around 14 bcm by 2015.  Domestic production stands at around 5 bcm a year, so much of this is expected to be imported, largely from Egypt the Arab Gas Pipeline through neighbouring Jordan.