Iraq marked its emergence as the second most powerful oil state in the Middle East by formally inaugurating the new crude oil pipeline from Zubair in southern Iraq to Yanbu on the Red Sea coast of Saudi Arabia.
The 1.65 million b/d IPSA-2, operational since last September, was inaugurated in a ceremony earlier this month attended by Iraqi Oil Minister Isam al-Chalabi and his Saudi Arabian counterpart, Hisham Nazer.
IPSA-2 raises Iraq's total export capacity to 4.9 million b/d. In addition to the new outlet through Saudi Arabia, Iraq has access to the Turkish Mediterranean Sea port of Ceyhan through a pipeline network with a capacity of 1.65 million b/d.
TANKER SHIPMENTS
Since the end of the war with Iran, exports through the tanker facilities at the head of the Persian Gulf have restarted.
Capacity is about 800,000 b/d, but next month this will jump to 1.6 million b/d when the final stage of repairs to severe war damage on the fourth berth at the Mina al-Bakr terminal is complete.
Tanker traffic through the terminal is still at a relatively low level. Iraq reports that about 350,000 b/d is exported through Mina al-Bakr, mostly to customers in the Far East.
This 4.9 million b/d export capacity is more than Iraq needs at present. Crude production is officially constrained by a quota of 3.14 million b/d imposed by the Organization of Petroleum Exporting Countries. Iraq has generally conformed to OPEC limits and appears to have no intention at present of changing this policy.
Iraq's demand for oil products is running at about 400,000 b/d. That reduces the volume available for export to about 2.6 million b/d.
On these figures, Iraq has 2.3 million b/d of flexibility that will stand it in good stead as production capacity is expanded to take advantage of greater demand for OPEC oil and the resulting abolition of national quotas that is forecast to emerge during the next few years.
Iraq's OPEC quota is, by design, identical to that of Iran. However, its export terminal capacity is well ahead of Iran's. And although both countries have reserves in the 90-100 billion bbl range, longer term Iraq looks set to outstrip its neighbor in production capacity during the 1990s.
EXPANDED SYSTEM
The $2.7 billion pipeline link through Saudi Arabia was conceived at the height of the Iran-Iraq war. In 1984, a 382 mile section of 48 in. line (IPSA-1) was laid from Zubair to PS3 on the existing Petroline link from Saudi Arabia's Eastern Province oil fields to a new export terminal at Yanbu.
Iraqi oil was commingled with Saudi oil in Petroline, giving the Baghdad government an invaluable 500,000 b/d of added export capacity at a crucial stage of the war.
Work on IPSA-2, which began in September 1988, involved a 596 mile section of 56 and 42 in. line from PS3 to a new terminal at al Muajjiz, 30 miles south of Yanbu. Six pump stations have been built along the line, each equipped with a 2,500 b/d topping plant to provide turbine diesel fuel.
Copyright 1990 Oil & Gas Journal. All Rights Reserved.