Iran, Iraq agree to connect oil pipelines

Business Materials 28 September 2016 13:47 (UTC +04:00)

Baku, Azerbaijan, Sept. 28

By Dalga Khatinoglu – Trend:

Iran and Iraq have agreed to connect their oil pipelines, Fars reported Sept. 28.

According to the report, the agreement was achieved between Iran’s Oil Minister Bijan Namdar Zanganeh and his Iraqi counterpart Adil Abdul-Mahdi on the sidelines of the 15th International Energy Forum in Algeria.

Fars says a part of Iraqi oil is expected to reach Persian Gulf through Iran.

Earlier Ali Kardor, the Islamic Republic’s deputy oil minister, said Aug. 30 that Iran is still studying export of Iraq’s oil through its territory.

Kardor, who heads the National Iranian Oil Company (NIOC), said Iran should study the conditions to define whether the project will be in its favour or not.

Earlier Reuters quoted Iraq’s Deputy Oil Minister Fayadh al-Nema as saying that the Iraqi government would consider selling crude through Iran if talks with the Kurdish autonomous region on an oil revenue sharing agreement fails.

Iran has problems in export of oil from some of its central regions.

Abdol-Rasoul Mirzaei, the manager director of Raham Refinery, said Sept. 23 that Iran is preparing to refine 100,000 barrels per day (b/d) of the Kurdistan Regional Government’s (KRG) crude oil at the Tabriz Refinery.

Both Tabriz and Raham refineries are in Iran’s South Azerbaijan Province.

Earlier Raham refinery’s first phase was inaugurated with an aim to produce 300,000 tons of bitumen per year. The second phase, worth $450 million, is projected to refine 50,000 b/d of crude oil.

Mirzaei said Raham refinery’s crude oil feedstock is similar to that of Tabriz refinery’s, and KRG’s crude oil could be processed there in future as well.

Both Iran and KRG officials have announced the continuation of oil transit and swap.

“There are several options for selling KRG’s oil through Iran, but the only optimal way is swap operations,” Mohsen Ghamsari, director of the International Affairs Department at National Iranian Oil Company, told SHANA Sept. 5.

He said KRG has requested Iran to help export its oil, but a deal hasn't been reached yet and negotiations continue.

Currently, KRG exports its 500,000 b/d of oil through Turkey.

For several years, Iraq’s KRG and Iran have been in talks to construct a pipeline that would transport the northern Iraqi oil to Iran for swapping the region's crude in the Persian Gulf.

However, negotiations have lagged so far as the regional administration in northern Iraq instead focused on developing an oil export route through Turkey.