Citigroup May Fund Iraq-Jordan Oil Pipeline, Official Says
Citigroup Inc. (C) is among international banks seeking to finance a pipeline that Iraq plans to build to export crude oil and natural gas through neighboring Jordan, an official at the State Company for Oil Projects said.
The Iraqi government expects to preselect companies from among 40 bidders vying to build and finance the pipeline from the central town of Haditha to Jordan’s Red Sea port of Aqaba, Nateq Balasem Khalaf, deputy director general of the state-run company, said in an interview in Baghdad.
“Citibank is among the bidders,” he said yesterday. Other interested banks and companies are from Russia, South Korea, Japan, Italy, China, Egypt, Jordan, and Germany, he said. Two Citigroup officials based in the Middle East declined to give an immediate comment when contacted today by phone.
Iraq, which holds the world’s fifth-largest proven oil reserves, is rebuilding its infrastructure and energy industry after decades of war and sanctions. SNC-Lavalin Group (SNC) is advising the government on ways to build new routes to export oil currently shipped via pipeline to Turkey and by sea through the Persian Gulf.
The new crude pipeline would carry 1 million barrels a day, including 150,000 barrels a day for Jordan’s domestic consumption, and the rest for export, Khalaf said. The gas pipeline would transport 252 million cubic feet a day, of which 100 million cubic feet would be exported to Jordan, he said.
The government plans to build and finance a separate section of the network itself to Haditha from Basra, a southern oil hub, Khalaf said. It will ask for bids from pipeline suppliers by year-end, he said.
Citigroup, a U.S. lender scaling back in some emerging markets, plans to open offices and branches in Iraq to benefit from an estimated $1 trillion of infrastructure spending there, Mayank Malik, the bank’s chief executive officer for Jordan, Iraq, Syria and the Palestinian territories, said in a June 27 interview.
Iraq will start operating its third offshore export facility for crude by the end of the year and plans to upgrade its two onshore terminals at Basra and Khor al-Amaya, Khalaf said. The government is building 16 crude-storage tanks in the southern port of al-Faw, each with a capacity of 58,000 cubic feet. Four are operational, another four are to be completed by the end of July and the rest by year-end, he said.
Iraq is on track to increase crude exports to 3.5 million barrels a day by the end of 2013, Khalaf said. The country produced 3.15 million barrels a day to 3.2 million barrels a day on average in June, according to an e-mailed Oil Ministry statement on June 29.
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