Qatar-US consortium set to sign deal to build Iraq oil pipelines

• UCC, Chevron and TI Capital team up
• Baghdad wants alternatives to Hormuz
• Year-long extension for Kirkuk-Ceyhan

A consortium of Qatari and US companies is set to sign an agreement with Iraq to study the construction of oil export pipelines to Turkey and Syria, as Baghdad looks for alternatives to Gulf shipping routes.

Iraq’s cabinet authorised the oil ministry to finalise a head of agreement and a non-disclosure agreement for the project with Qatar’s UCC Holding, and the US companies Chevron and TI Capital.

An Iraq public company could join the group to execute the project, which involves the construction of a pipeline from the southern oil hub of Basra to Haditha in the western Al-Anbar province, from where it will be extended to Kirkuk and Ceyhan in Turkey.

Another project includes the building of a pipeline from Basra to Haditha to the Western Syrian port of Baniyas on the Mediterranean.

“This will enable the consortium to begin preparing comprehensive technical and financial studies and plans and to evaluate these vital routes, without any final financial or contractual obligations on the part of the oil ministry,” the cabinet said in a statement.

In April, Iraq’s cabinet approved $1.5 billion for a $5 billion project to construct the pipeline from Basra to Haditha.

Iraq, Opec’s second largest oil producer, is already exporting more than 200,000 barrels per day via the northern Kirkuk-Ceyhan pipeline.

One-year extension for pipeline pact

The 52-year-old pact governing oil flow via the 970-km Kirkuk-Ceyhan pipeline was due to end on July 27 after Turkey decided last year to terminate the agreement. However, Turkey has reportedly agreed to a request by Iraq to extend for one year.

The expected agreement follows a series of meetings between senior Iraqi and Turkish officials in Ankara last week.

“The two sides agreed to continue coordination and technical and legal consultations,” Iraq’s state news agency reported, citing a statement by the Iraqi foreign ministry.

“It is expected that the next stage will witness the signing of an executive protocol that guarantees the continuation of Iraqi oil exports, including crude from the Kurdistan Region of Iraq,” it said, adding that Turkey expects the conclusion of a new long-term agreement within a year.

The pipeline plans come as Baghdad steps up scrutiny of energy contracts under a wider anti-corruption drive launched by Prime Minister Ali Al-Zaidi to recover large stolen public funds by former officials.

Further reading:

• Iraq urgently needs to find ways of getting its oil to market
• Investors back Iraq’s long‑term potential
• Iraq presses ahead with oil pipeline to Jordan

An official said on Saturday that the crackdown would be extended to oil contracts awarded within two oil licensing rounds during the past few years.

“The review process is not limited to licensing rounds alone, but extends to various projects related to oil production, refining and investment, with the aim of developing practical measures that improve efficiency and ensure optimal use of national oil resources,” Jassim Al-Moussawi, a member of parliament’s oil and gas committee, told the official daily Al-Sabah.