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Turkey to help Iraq build more oil, gas pipelines

Ankara, May 11, 2013

Opec member Iraq will need new oil pipelines to export its crude to world markets as it prepares to raise production, and Turkey is keen to help its neighbour build the infrastructure, said Turkey's Energy Minister.

Iraq, the world's fastest-growing oil exporter, aims to boost the 2.4 million barrels per day of oil it ships to world markets this year, mostly by increasing output from the fields around the disputed northern oil city of Kirkuk in the semi-autonomous Kurdistan region.

The opening of new export outlets and investment by foreign companies at the southern oil fields around Basra, where the vast majority of Iraqi oil is located, have boosted Iraqi shipments.

But Taner Yildiz said once Iraq's capacity increases, existing infrastructure will be insufficient.

"The outlets via Basra are not enough for such a capacity, so nothing is more natural than the construction of new pipelines," Yildiz told an energy conference in Istanbul.

"And Turkey will make the biggest contribution here."

Currently only a fraction of the 1.5 million bpd-capacity Iraq-Turkey pipeline from Kirkuk to the Mediterranean hub of Ceyhan is used as Iraq exports most of its oil from the south.

Ankara and Baghdad have in the past discussed building more pipelines but the projects have failed to gain traction. Their differing stances on the Syrian crisis, the Kurdish region of Iraq and other issues has soured diplomatic ties in recent years.

Sitting on 8.5 billion barrels of crude reserves, Iraq has been described as the "next Saudi Arabia," even though its ambitious export targets of more than 7 million bpd by the end of the decade are threatened by political instability.

Turkish companies were part of the five consortiums in southern Iraq that have secured projects worth $25 billion, Yildiz said.

He also added that the Iraqi Kurdistan region in the north is also a natural area for cooperation.

Resource-hungry Turkey has been increasingly courting Iraqi Kurds, who are at loggerheads with the central government over how to exploit the country's oil reserves and share the revenue.

Ankara and the Kurdistan Regional Government (KRG) have been negotiating energy deals ranging from exploration to exporting since last year -- a move that has antagonised Baghdad which says it alone has the authority to control exports and sign contracts.

"Just like Iraq's south, Iraq's north is a natural area for projects," Yildiz said.

Turkish President Abdullah Gul also discussed Iraq's energy resources in a speech at the same conference. New infrastructure to carry Iraq's oil via Turkey would be crucial for European markets, he said.

"New oil and gas pipelines that will be constructed parallel to Iraq's north-south lines would allow Iraq's resources to be shipped to both our country and to Europe," Gul said. "This will be crucial for Iraq to reach secure markets," he added.-Reuters

Tags: Oil | Iraq | Turkey | gas pipeline |

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