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Iraqi Kurdistan oil pipeline export capacity to double

Duhok, Iraq, August 19, 2014

The capacity of Iraqi Kurdistan's independent oil pipeline will almost double to at least 200,000 barrels per day by the end of this month, helping the semi-autonomous region increase exports and revenue, industry sources and officials said.

Oil revenues are a lifeline for the Kurdish Regional Government (KRG) in northern Iraq, whose peshmerga forces are being supported by US air strikes in their battle against the radical Sunni militants of Islamic State.

"Work to increase the capacity will probably be completed by the end of this month. Once it is completed, pumping can increase to up to 220,000 barrels per day (bpd)," one Turkish official told Reuters.

Industry sources also said the capacity of the pipeline to Turkey, which began operating at the start of this year, was set to rise to around 200,000-220,000 bpd from 100,000-120,000 bpd before the flow stopped for upgrade work.

One of the sources said capacity could climb to 250,000 bpd in two to three months' time.

"The crude flow is set to restart when the upgrade work is finished, but the 200,000 bpd to 220,0000 bpd of crude flow will be dependent on the rising oil production in northern Iraq," one official said.

A joint venture of Anglo-Turkish company Genel Energy and Sinopec's Addax Petroleum is working to ramp up production in the Taq Taq oilfield, Iraqi Kurdistan's largest, to 140,000 bpd by the end of this month.

After months of fruitless talks with Iraq's central government, the KRG in May started to export crude on its own independent pipeline to the Turkish Mediterranean export terminal of Ceyhan.

The KRG pipeline is located at a distance from the areas controlled by Islamic militants.

The move has infuriated Baghdad, which claims the sole authority to manage Iraqi oil. It has cut allocations to the KRG in the budget and has tried to block KRG's oil sales by taking legal action.

So far, 7.8 million barrels of Kurdish oil have flowed through the independent pipeline, of which 6.5 million have been loaded onto tankers for export.

The Kurds have managed to load seven export cargoes from Ceyhan, according to Turkish Energy Minister Taner Yildiz.

EXPORTS FINDING CUSTOMERS

The tricky part for Iraqi Kurdistan has so far been to find buyers to export the oil. Baghdad's persistent efforts to block sales initially deterred some customers.

Iraqi Kurdistan delivered its third major cargo of crude oil out of Ceyhan and a fourth was sailing to Croatia on Friday.

Around $350 million in oil sales have been completed or are under way from shipments sent via the KRG pipeline, a Reuters analysis of satellite tracking data shows. - Reuters




Tags: Iraq | Kurdistan | oil pipeline |

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