Iraq Finalises Tender Terms for Syria Export Pipelines
IHS Global Insight, 21.04.2011
Iraq has been finalising the terms of engagement for the contract to construct two crude export pipelines and a gas pipeline through Syria, with the likelihood that these will be offered to investors on a build-operate-transfer basis. The capacity of the pipelines is expected to reach 2.75 million b/d, transiting Syria to the Mediterranean port of Banias, where they can be refined or loaded as crude. The first would transport heavy crude from the Baiji area in the north—including a feed from the Southern fields—with capacity of 1.5 million b/d. This would potentially include crude from Majnoon, Halfaya, Badra, Ahdab, and East Baghdad, as well as Sonangol's Najmah and Qayara heavy oil fields. The second would follow the old pipeline route from Haditha to Banias, with a capacity of 1.25 million b/d of Southern Iraqi crude. The previous pipeline was damaged in a number of locations during the 2003 invasion of Iraq.
SNC Lavalin has been involved in initial consultation work on the projects, but at earlier stages—and on the Syrian section—Russia's Stroytransgaz has been involved in the rehabilitation work (see Syria: 20 September 2010: and Syria: 23 April 2009: ).Significance: It has been obvious since 2003 that Iraq would need new export capacity to make way for its major expansion plans—with security, too, an issue arguing against a continuation of the current dependence on a cluster of southern ports around Basra (also the target of expansion) and the northern export pipeline to Ceyhan in Turkey. As well as potentially reducing bottlenecks as Iraqi crude capacity comes onstream from the various technical service contracts now in circulation, this is a major boost to Syria's own plans to boost refining capacity, which would make limited sense on Syria's declining output. Syria's long-standing energy hope has been to become a transit point for regional oil and gas, allowing a shaving of volumes for its own needs and boosting economic growth through transit fees and potential processing margins.
