Eric Watkins
OGJ Oil Diplomacy Editor
LOS ANGELES, Apr. 24 -- Iraq and Syria, following broad-ranging talks between Iraqi Prime Minister Nuri Al-Maliki and his Syrian counterpart Mohammed Naji Otri, have agreed on a new plan to repair the bomb-damaged Kirkuk-Banias oil pipeline.
"Discussions led to a strategic agreement in the areas of oil, gas, power, and trade," said Al-Maliki, adding, "The two sides also reached agreement on repairing the pipeline across Syria."
The pipeline, which extends 850 km from Iraq's northern oil fields at Kirkuk to Banias where Syria has a refinery, has been closed since the US-led invasion of Iraq in March 2003, when the line's main K3 pumping station was bombed by US warplanes.
The line, which was shut down in 1982, was targeted after Iraq reopened it in 2000 to bypass United Nations' sanctions, shipping 200,000 b/d to Syria which refined the crude for its domestic market and exported an equal amount of its own oil to world markets.
In 2007, Iraq and Syria agreed to reopen the pipeline as part of an effort to step up exports of Iraqi crude.
"We have a timeline set for work on the pipeline, which will expand our oil export options. Our oil export volumes so far have been unacceptable," said Iraqi Deputy Premier for Economic Affairs Barham Ahmed Saleh.
At the time, Saleh also said Iraq had invited Russia's Stroytransgaz to submit an offer to reactivate the line. "We will discuss with Stroytransgaz what they come up with," said Saleh, adding, "We are clear and serious about this project."
Stroytransgaz eventually signed a protocol with Iraq to reactivate the line, but Iraqi officials recently said the work had not been undertaken.
"The Russian company failed to do the job and now we are seeking other foreign firms to evaluate the damage and rebuild the pipeline," said a spokesman for the Iraqi oil ministry on Apr. 21.
Iraq is seeking to upgrade and expand all of its oil export infrastructure in order for it to handle projected output increases.
Under a plan announced in March, current Iraqi production of 2.4 million b/d would be increased to 2.9 million b/d by yearend 2009 and to 6-8 million b/d by 2013.
Earlier this month, a senior Iraqi official said his country was seeking to increase its oil exports through the construction of two pipelines to Jordan (OGJ Online, Apr. 17, 2009).
Contact Eric Watkins at [email protected].