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Iraq to revive federal crude link from Kirkuk to Ceyhan

27 Nov 2017, 4.38 pm GMT

Iraq to revive federal crude link from Kirkuk to Ceyhan

Dubai, 26 November (Argus) — Iraq plans to build a new pipeline to replace a damaged section of an existing pipeline extending from the Kirkuk oil fields in northern Iraq to the Turkish port of Ceyhan, the oil ministry said today.

The new pipeline will be built from the city of Baiji in the northern Salahuddin province to Fishkabour on Iraq's border with Turkey, allowing the federal government to bypass the only functioning crude link from Kirkuk to Ceyhan that is controlled by the Kurdistan Regional Government (KRG).

The old pipeline, which has not been in operation since 2014, "has been severely damaged by repeated acts of sabotage by terrorist groups," oil ministry spokesman Assem Jihad said, referring to Islamic militant group Isis.

Iraq's oil minister Jabbar al-Luaibi has called on the oil ministry to prepare tender documents for the project which will be auctioned under a build-operate-transfer (BOT) model. Companies will be invited to participate in this tender in the near future, the oil ministry said.

This announcement comes around five weeks after Iraqi forces regained control of the oil and gas assets in the Kirkuk area on 17 October, including the Avanah and Bai Hassan fields, from the KRG. The two fields produce a combined 275,000 b/d.

But the production from these fields is currently trapped as Baghdad refuses to send crude through the KRG-controled northern export pipeline to Ceyhan until an agreement is reached with Erbil. Turkey is the only export outlet for the crude produced in northern Iraq.

Al-Luaibi in late-October asked state-owned companies, including North Oil (NOC) to draw up an urgent plan to repair the federal pipeline between the fields in Kirkuk and Ceyhan.

State-owned marketer Somo's director general Alaa Alyasri said earlier this month that the pipeline could be repaired in as little as three months, although other oil officials suggest this is unrealistic.


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