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ENERGY > Turkey rushes to buy Arbil gas

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Turkey is moving to buy natural gas from Arbil Northern Iraq after the start of crude oil purchases from the Kurdistan Regional Government (KRG) to replace its shortfall, further irritating Iraq’s central government

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Natural gas burns at Berjisiya, 35 kilometers southwest of Basra, Iraq. Turkey plans to buy both crude and natural gas from Northern Iraq as it especially faces a crude shortage due to the decreasing flow from Iran. AP photo

Natural gas burns at Berjisiya, 35 kilometers southwest of Basra, Iraq. Turkey plans to buy both crude and natural gas from Northern Iraq as it especially faces a crude shortage due to the decreasing flow from Iran. AP photo

After starting to purchase crude from the Kurdistan Regional Government (KRG) in Iraq’s north, Turkey has sped up efforts to buy natural gas from Arbil.

Iraq’s energy regulator EPDK has demanded that engineering and construction company Siyahkalem, a new actor in the region, present its deal with the northern Iraqi authorities within 90 days.

Siyahkalem was the sole candidate in a tender to transport natural gas from Iraq as the deadline for applications to the EPDK passed in April.

Siyahkalem’s application covers annual imports of 700 million cubic meters initially starting in
the year 2004, which might be gradually increased up to 3.2 billion cubic meters.

The Energy Ministry and the Foreign Ministry have also approved the agreement, Anatolia news agency quoted an EPDK official as saying yesterday.

A number of large companies avoided bidding for the northern Iraqi natural gas mainly due to the lingering dispute between Arbil and the central Iraqi government in Baghdad.

Turkey’s move to buy crude oil from Arbil, in a bid to replace the shortfall due to the decreasing oil flow from embargo-hit Iran, has unnerved Baghdad. Baghdad and Arbil are in a dispute over oil revenues ahead of the release of a lingering hydrocarbon law, which is expected to resolve the issue.

However, Siyahkalem is confident about signing a deal with northern Iraq, said Hakan Yazıcı, the general coordinator of the company, during a phone interview yesterday.

Currently there are no natural gas pipelines between Iraq and Turkey, but Turkey’s pipeline firm Botaş has pledged to finalize a project from Mardin in the country’s southeast to Iraq, the EPDK official said.
Yazıcı told the Hürriyet Daily News that Arbil was responsible for carrying gas to the Turkish border.

However, “this is a construction business,” he said, adding that Siyahkalem, a company mainly active in infrastructure, superstructure and energy projects, might be a candidate for pipe building there.

Believing that the Baghdad-Arbil dispute causes no risks for the project would not be realistic, but the company has taken all possible measures to minimize risks, Yazıcı also said, without elaborating further.

Siyahkalem active in Pakistan as well

Siyahkalem carries out large projects in Pakistan and is also building the Turkish Prime Ministry’s National Archives Complex under the supervision of the Housing Development Administration of Turkey (TOKİ).

Separately, Iraq has inaugurated a prized oil field in its south, the latest step to develop its untapped energy resources.

Ali Kayalar contributed to this report from Istanbul.

July/19/2012

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