Iraqi Kurds May Build Direct Oil-Export Pipe in 18 Months

Iraqi Kurdistan plans to build a million-barrel-a-day oil pipeline to Turkey’s Ceyhan port in as little as 18 months, providing an export link that totally bypasses Iraq’s existing network.

“Between 18 months to two years from now the new pipeline from our region to Ceyhan will be ready,” Ashti Hawrami, the Kurdish Regional Government’s natural resources minister, told reporters at an energy conference in Istanbul today.

A new pipeline running from Iraqi Kurdistan to Turkey would bypass Baghdad, with which the KRG is embroiled in disputes over export revenue, and require Turkey’s approval. No one at the Turkish energy ministry including Minister Taner Yildiz was immediately available to comment when calls were placed to their offices today.

Kurdistan will complete a 40-kilometer (25-mile) line by year-end that will link to Iraq’s main export pipeline extending from Kirkuk to Ceyhan. With a capacity of 300,000 barrels a day, it won’t meet export needs, he said.

Kurdistan, whose economy has boomed with oil exploration since Saddam Hussein’s ouster in 2003, expects exports to soar more than 40-fold to 2 million barrels a day by 2020 after the pipeline network is completed. Producers including Genel Energy Plc (GENL), the region’s largest, are shipping oil on trucks through Turkey and Iran to international buyers, Hawrami said.

Rising Exports

Mehmet Sepil, president of London-listed Genel Energy, said at the same conference that the 40-kilometer pipeline from Dohuk to Fishkabur on the Turkish border will carry 200,000 barrels a day from its Tawke and Taq Taq fields and the remainder from other producers.

The main line, controlled by the Iraqi central government, needs maintenance before it can reach full capacity of as much as 1.6 million barrels a day after years of disuse because of UN sanctions against Hussein’s regime.

The Kurdish region, which exports 30,000 to 50,000 barrels a day of Genel Energy crude by truck to Turkey, plans to increase shipments to 1 million barrels a day by the end of 2015 and 2 million barrels a day by 2020 once the pipeline network is operational, Hawrami said.

The Kurdish region’s oil-production capacity will rise to 400,000 barrels a day by the end of this year from 300,000 barrels a day now, Hawrami said.

KRG also plans to start shipping natural gas to Turkey, where demand will probably grow 10 percent to 48 billion cubic meters this year, from 2016 or 2017 at an annual rate of 10 billion cubic meters, Hawrami said. “Turkey is a very important market for our gas and a very important corridor for our energy.”

KRG will set up its own metering system near Fishkabur to monitor oil flow once the Dohuk-Fishkabur pipeline is operational, Hawrami said.

To contact the reporters on this story: Ercan Ersoy in Istanbul at eersoy@bloomberg.net

To contact the editors responsible for this story: Benedikt Kammel at bkammel@bloomberg.net; Will Kennedy at wkennedy3@bloomberg.net

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