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Iraq approves Hormuz oil export back-up plan
ByREUTERS
March 18, 2012 16:41
Plan includes building pipeline to ship oil to Turkey in case of crisis if Iran decides to close strategic Strait.
Iranian submarine in Strait of Hormuz

Iranian submarine in Strait of Hormuz 311. (photo credit:REUTERS/Stringer Iran)

BAGHDAD - Iraq has approved a plan to expand its oil export routes by adding capacity from its northern fields and building a pipeline to ship oil from southern fields to Ceyhan in Turkey, a government spokesman said.

The contingency plan was set by the government's energy and economic committee to deal with any potential crisis should Iran close the Strait of Hormuz, which would halt about 80 percent of Iraq's oil exports.



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Iran has threatened to close the Strait of Hormuz, used for a third of the world's seaborne oil trade, if Western moves to ban Iranian crude exports crippled its energy sector.

"Short and mid-term plans will be through boosting crude pumping and upgrading export capacity via Ceyhan port in Turkey. Also to increase the number of trucks that are shipping crude," government spokesman Ali al-Dabbagh said on Sunday.

Iraq exported 2.014 million barrels per day in February, including 1.711 million bpd from its southern oil hub of Basra and via exports terminal in the Gulf, and 375,000 bpd from its northern fields around Kirkuk to Ceyhan.

Dabbagh said plans approved by the government were a short-term measure based on recommendations from the oil ministry, and said stepping up efforts to convince Iran and the United States of the need to avoid closing the Strait of Hormuz.

"The oil ministry suggested accelerating work to complete building the north strategic pipeline and connect it to the Kirkuk-Ceyhan pipeline to export oil from Basra via Ceyhan port," Dabbagh said.

Iraq has also been moving ahead with building a 680 kilometer pipeline able to transport 1 million bpd of crude from southern oilfields around Basra to a main pumping station in Haditha in the west, an oil ministry spokesman said.

"We managed to complete constructing 200 km of the pipeline with plans to finish all work in 2013. We will have the flexibility of shipping Basra crude to various destinations, including towards Ceyhan port," Asim Jihad said.

The Kirkuk-Ceyhan pipeline has come under sabotage attacks many times since the 2003 US-led invasion, and frequently breaks down due to technical faults.

Under the contingency plan, Iraq may revive the Iraq-Syria pipeline as a long-term measure to ship crude from southern fields to Banias in the Mediterranean. Plans to build a pipeline to transport crude to Jordan's Aqaba port were also considered.

Last year, Iraqi and Jordanian officials said the two countries had agreed in principle to build a pipeline to supply Jordan with crude oil in future. Iraq transports 10,000-15,000 bpd of crude exports in trucks to Jordan.

Dabbagh said the plan also encouraged talks with top OPEC oil exporter Saudi Arabia to ship Iraqi crude to Yanbu on the Read Sea.

Iraq has managed to operate a first floating terminal which could help boosting oil exports from the southern fields to 2.2 million bpd.
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