Iraq proposes crude oil lines to Jordan

Iraq is seeking to increase its crude exports through the construction of two oil pipelines to Jordan, according to a senior Iraqi official.

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Apr. 17 -- Iraq is seeking to increase its crude exports through the construction of two oil pipelines to Jordan, according to a senior Iraqi official.

Sa'd al-Hayyani, Iraq's ambassador in Amman, told Jordan's Al-Sabil newspaper that one pipeline would extend from Iraq to Jordan's Port of Aqaba, while the other would extend from Bayji in Iraq to the refinery at Zarqa.

Al-Hayyani said the line to Zarqa would provide Jordan with the opportunity to "secure its oil needs" of 100,000 b/d, while the line to Aqaba would generate needed transit revenues for Amman.

Al-Hayyani said the two projects would be discussed during the visit of Jordanian Prime Minister Nadir al-Dhahabi to Baghdad before the end of April.

Earlier this month, Jordan received 11,000 bbl of Iraqi oil, the first delivery under a new agreement, which revises the subsidy the kingdom receives in the light of increased world prices.

Jordan's Energy Minister Khaldun Qteishat said 41 tanker trucks loaded with 11,000 bbl of Iraqi oil crossed the border Apr. 6, while another 88 tankers with 35,000 bbl were scheduled to arrive 24 hr later.

The deliveries were the first under a new agreement Jordan reached with Iraq that changed the baseline to $104/bbl from $75/bbl for the discount the kingdom receives on its purchases.

Under an agreement signed in August 2006, Jordan received an $18/bbl subsidy that has since been raised to $22/bbl following a visit by King Abdullah II to Baghdad last month.

Qteishat said Jordan currently receives 10,000 b/d or 10% of its needs at the subsidized price from Iraq, but he hoped that amount would be increased to 30,000 b/d "in the future."

Meanwhile, Jordan Petroleum Refinery Co.—the country's sole refinery—announced plans in early April to move ahead with an expansion aimed at raising capacity to 130,000 b/d from 100,000 b/d.

JPRC said it signed a memorandum of understanding with an unnamed "strategic partner" to carry out the $1.5 billion expansion, pending the outcome of a further study of the project.

The proposed expansion would enable Jordan to meet 100% of its domestic needs for refined products, up from the current 80%.

Jordan currently consumes more than 4.7 million tonnes a year of refined products, but demand is said to be rising at a rate of 22%.

Contact Eric Watkins at hippalus@yahoo.com.

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