Iraq, Jordan pipeline to by-pass Iran control

AMMAN - Hürriyet Daily News

A worker checks wires in front a gas pipe line section. AFP PHOTO / POOL /SERGEI KARPUKHIN

Iraq and Jordan have launched technical talks to build a major pipeline to carry Iraqi oil from Basra to Jordan’s Aqaba port, thereby bypassing the Straight of Hormuz and Iran amid an ongoing crisis with Turkey and the West over their interest in northern Iraq.

“These are long-term projects,” Jordanian Foreign Minister Naser Judeh told a group of visiting Turkish journalists on Feb. 26. He confirmed that there was “an exchange of visits at the technical level” between Jordan and Iraq to explore the possibility of building such a massive pipeline between the two neighbors to allow Iraq to carry its oil and gas resources to world markets without fearing a potential standoff in the Hormuz or problems related to the Kurdistan Regional Government (KRG) and Turkey.

The projects are ultimately mid-term and long-term projects, he said, but Iraqi Business Council President Majid Saadi said the two countries were close to a tender to construct the $18 billion project in March and that giant developers from the United States, Canada, Germany and China were interested in building the pipeline, according to the Jordan Times.

The pipeline is slated to run from Iraq’s southern oil-producing region of Basra to Anbar province and then to Jordan’s port city of Aqaba, to export Iraq’s resources to world markets.

Saadi said the feasibility study for the 1,680-kilometer pipeline to export 2.25 million barrels per day suggested the project would generate $2 billion to 3 billion in revenue each year for the country. A gas pipeline could accompany the oil pipeline, officials said.

Iraq is eyeing Jordan as an important partner in its bid to market its oil and gas as well as its oil products by building a refinery on Jordanian territory.

Iraq’s move comes at a moment when Baghdad is engaged in talks with international oil and gas companies that want to conduct business in northern Iraq separately from their activities in southern Iraq. Since Arbil and Baghdad have failed to reach an agreement over how to share oil and gas revenues, the central government is strictly opposed to international companies’ efforts to make deals with Arbil.

Before Ankara-Baghdad ties plummeted, Turkey and Iraq were discussing the possibility of building a pipeline from Basra to Ceyhan port in Adana to bring Iraqi oil to world markets. Turkey’s good relations with Arbil and the aggressive moves of Turkish companies in the north have irked Baghdad recently, leading to the suspension of Turkish Petroleum Corporation’s (TPAO) contracts in Basra.

Jordan is heavily dependent on imported oil and gas, as 96 percent of its oil and gas come from other markets. If the proposed pipeline is realized, around 120,000 to 150,000 barrels a day of Jordan’s needs could easily be fulfilled.

Jordan suffered from the Egyptian response to the Arab Spring as Egypt’s gas and oil supplies dropped significantly in the last two years. “That cost us a total of 4 billion dollars in the last couple of years. And unfortunately, we are hostage to the fluctuation of oil prices in the world. A one-dollar increase in Brent oil brings an additional 40 billion-dollar cost to the Jordanian economy,” Judeh said.

Call to Turkish investors

Recalling Jordanian Prime Minister Abdullah Ensour’s description of Turkey as a big brother, Judeh asked Turkey to show its status as the region’s big brother by sending more of its investors to Jordan, particularly as the Middle Eastern country experiences a dire economic crisis.

Praising Turkish contractors and manufacturers of home appliances, Judeh said: “When we say brothers, we want to see Turkish investors and businessmen continue to look at Jordan, to look at the political stability of Jordan and look for the environment of investment. There are major projects and we have an aggressive and ambitious plan on energy, transportation and water conveyance networks.”

Regarding the Red Sea-Dead Sea canal project as well as other important projects, Judeh called on Turkish business leaders, saying: “If you look at investments in Jordan, currently the two largest investors are French and Kuwaiti, one from the Arab world the other from Europe. I believe that there are series of opportunities for Turkey to be involved in this picture.”