Syria is key in pipeline plan

06 February 2012

Crude oil export pipeline via Syria means security and stability is vital

Iraq and Syria have not always been the best of neighbours. Although cordial during the Saddam-era, relations between the two have been tense since the US-led invasion of Iraq in 2003. Damascus has often been criticised in Baghdad for facilitating the flow of foreign fighters into the country.

While Syrian government forces have been battering the city of Homs, officials in Iraq’s Oil Ministry have been busy redrawing their oil export pipeline plans, with Syria as a new major focus.

The Oil Ministry intends to build a crude oil pipeline running from its southern oil fields to depots at Haditha in the Anbar governorate, about 240 kilometres northwest of Baghdad and then on to Syria where it will continue to the Mediterranean coast for export. It has dropped plans to expand and rehabilitate the current northern oil pipeline running to Turkey.

The Oil Ministry and sections of parliament had a fractious relationship over the past few years

If the project is launched, the pipeline deals will be tendered on a build, operate and transfer (BOT) basis, a first for Iraq, which will bring with it a new set of challenges for the Oil Ministry. Separate agreements will have to be signed for the supply of natural gas to the pumping stations along the pipeline’s route and there are also questions over the ownership of the oil being transported, all creating a challenging scenario for the Oil Ministry.

The deal could also face considerable opposition if the Al-Assad regime is toppled in Damascus. Considering the fate of Iraq’s private power programme, which collapsed in mid-2011, potential bidders for the pipeline will be wary.

These are not the only obstacles. According to the Iraqi constitution, intergovernmental agreements must be ratified by the country’s parliament. The Oil Ministry and sections of parliament have had a fractious relationship over the past few years, with key policy decisions being blocked by the legislative body. 

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