Iraq, Jordan ink $18 billion oil deal

Iraq, Jordan ink $18 billion oil deal

AMMAN - Agence France-Presse
Iraq, Jordan ink $18 billion oil deal

Spherical tanks are seen at Jordan Petroleum Refinery in the city of Zarqa, 25 km northeast of Amman April 2, 2013. REUTERS/Muhammad Hamed

Amman and Baghdad have signed a deal to extend an $18-billion pipeline to the Red Sea city of Aqaba to export Iraqi crude and supply Jordan with oil and gas, an Iraqi official has said.

“The two countries have signed an agreement to build a 1,700-kilometer pipeline from Basra to Aqaba,” Nihad Musa, director of the State Company for Oil Projects, told Jordan’s official news agency, Petra, in Amman on April 9. “The designs and technical studies, which are currently being conducted by a Canadian company, are scheduled to be done by the end of this year.”

Musa said Iraq “is serious about implementing the $18 billion project. It is important for the two countries.”

Under the deal, which is expected to be operational by 2017, “Jordan will get 850,000 barrels of oil as well as 100 million cubic meters of gas a day,” the Iraqi official was quoted as saying.

The kingdom relies on imports for 95 percent of its energy needs. A rise in fuel prices by up to 53 percent in November 2012 prompted violent protests in which three people were killed and more than 70 injured.

Iraq, which sits on the region’s third-largest oil reserves after Saudi Arabia and Iran at 115 billion barrels, hopes the move will increase and diversify its exports.

Jordan currently imports 10,000 barrels of Iraqi oil per day at well below the global market value and has recently agreed to increase that amount to 15,000 barrels.

Iraq delivered oil to Jordan for preferential prices under the U.N. oil-for-food program during the rule of executed President Saddam Hussein.