The first cargo of crude oil to be moved through the pipeline from Iraq under the UN oil-for-food deal will be shipped to the Aliaga refinery near Izmir operated by state-owned refiner Tupras, according to the Turkish government’s gas and pipeline agency, Botas.
The Iraqi oil, which started flowing on 11 December, will be stored at the Ceyhan terminal at the Turkish end of the pipeline until the first tanker, chartered by Tupras, arrives on 13 or 14 December, pipeline contracting sources say.
Tupras will lift 3.65 million tonnes a year (t/y) of crude oil, equal to 75,000 barrels a day (b/d) of crude under an agreement signed with Iraq on 10 December and later approved by the UN. Before the pipeline was shut down by UN sanctions in 1990, Turkey used to buy about 70 million t/y of Iraqi oil, equal to 40 per cent of its import requirements. The sources say the price of the oil will be about that quoted by Iraq recently of Brent minus $1.55 a barrel.
Botas expects the volume pumped through the pipeline to reach 650,000 b/d. At this rate, the Ceyhan terminal has about two days worth of storage capacity. After the first tanker shipment, the Iraqi oil may be diverted at Ceyhan into another pipeline which runs north to Tupras’ Central Anatolian refinery, the sources say.
There is still a question-mark over the quality of the first crude to be shipped, because it was trapped in the pipeline during the six years of UN sanctions. However, Tupras sources say they have been given indications from the Iraqi authorities that the oil will not be of significantly lower quality than normal Kirkuk crude. It has been reported that about a quarter of the 12 million barrels of oil trapped in the pipeline had already been paid for by Turkey before sanctions were imposed. The Tupras sources say this will be dealt with as a separate issue from the deal just signed.