Syria says Iraq oil, gas pipeline tenders to be issued soon
Dubai (Platts)--25Jan2011/815 am EST/1315 GMT
Syria and Iraq have reached final agreement to build two oil pipelines
and a gas pipeline between their two countries and tender invitations will be
issued soon, Syrian Oil Minister Sufian Alao was quoted as saying Tuesday.
Alao was quoted by Syrian newspaper Al-Thawra as saying an existing oil
pipeline from Iraq to Syria was being repaired.
The pipeline, linking the northern Iraqi oil region of Kirkuk to the
Syrian Mediterranean port of Banias, was shut down in the 1970s when relations
deteriorated between the rival Ba'ath parties in power in Damascus and
Iraq reopened the line in 2000 to bypass UN sanctions, shipping some
200,000 b/d of Kirkuk crude to Syria, which used the crude in its own
refineries and exported an equal amount of its own oil to markets.
The leaky pipeline, which has a capacity to carry 300,000 b/d of crude
oil, has been shut since the US-led invasion of Iraq in March 2003, when the
main K3 pumping station along the pipeline was damaged by US air strikes.
Alao did not say when work, which has already been delayed since initial
agreement was reached to repair the pipeline in 2007, would be completed.
Iraq has said it plans to build three pipelines through Syria for heavy
and light oil as well as natural gas to cope with new export capacity once
incremental production comes on line from fields being developed by foreign
oil companies under long term service contracts.
The heavy oil pipeline would likely transport heavy crude from the
northern Qayara and Najmah oil fields, which were awarded to Angola's
The light crude oil pipeline would carry Kirkuk crude oil to Banias.
Iraq currently exports its Kirkuk blend crude oil to the Turkish port of
Ceyhan, which lies north of Banyas. There are plans to rehabilitate the
existing Kirkuk-Ceyhan twin pipeline system, which has a design capacity of
1.6 million b/d, following a deal with Ankara to extend the transit agreement.
A senior Iraqi official said recently that while the Syrian pipeline
option had been discussed for years, there was now movement on the issue with
Baghdad seeking foreign investors for the projects.
One of the Iraqi gas fields awarded in last year's gas auction, Akkas,
lies in the north near the border with Syria. The field, which is slated to
produce 400,000 Mcf/d of gas when developed, has been earmarked as a potential
source of exports in the future to the European market, possibly through the
Arab Gas Pipeline that carries Egyptian Gas through Jordan, Syria and Lebanon
and is being extended to the Turkish border.
Alao referred to plans to build a 56-inch pipeline with capacity to
transport 110 million cu m/d of natural gas from Iran's South Pars gas field
through Iraq and Syria, where it would link up with the Arab Gas Pipeline.
The agreement with Iran was reached during talks January 20 in Damascus
last week with Iranian Oil Minister Masoud Mirkazemi. The two sides signed a
cooperation agreement allowing Iranian gas exports through Syria and then on
to Europe with the proposed pipeline.
Syria has been ramping up its gas production in recent years to meet high
domestic demand. Alao said total gas output last year rose to 10.07 Bcm, up
from around 9.1 Bcm/year in 2009. Syria produced an average 27.5 million cu
m/d last year.
Because Syria cannot produce sufficient gas domestically, it has to rely
on imports to meet rising demand for power generation as it phases out
reliance on fuel oil. At present Syria is importing around 1.45 Bcm/year from
Egypt but is seeking additional supplies.
Alao said that the electricity sector accounted for 87% of total gas
usage, taking 6.704 million cu m/d of the 8.9 million cu m/d of clean gas
supplied by gas processing plants.
Oil production rose marginally to a total 140.931 million barrels in
2010, an average of 386,000 b/d, a slight increase over 383,000 b/d produced
the previous year, he said.
--Kate Dourian, firstname.lastname@example.org
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