Iraq began to pump oil to a new terminal in the Gulf today (Sunday) in an effort to increase its crude oil export capacity by 850,000 barrels per day. This new outlet should increase exports immediately by 300,000 barrels per day.
Prime Minister Nuri al-Maliki, in a symbolic inauguration ceremony, opened the valve to a pipeline which runs from the oil fields in Southern Iraq to Fao, a port 332 miles south of Baghdad. Loading at the outlet has been delayed several times due to problematic weather and technical troubles, but now oil will be pumped in a last test before tankers begin loading next week.
The new unit will potentially be able to export upwards of 850,000 barrels each day according to Falah al-Amri, the chairman of the State Oil Marketing Organization. He said, “We are ready to market these new capacities, particularly in promising markets in Asia where our crude exports to China currently average 500,000 barrels a day.” He added that oil exports from southern Iraq number 1.7 million bpd and from northern Iraq, 400,000 bpd. Al-Amri is hoping those numbers increase to 2.1 million and 450,000 respectively.
Iraq launched a program to increase oil export output in 2007, with an end goal of creating five offshore floating terminals in the Gulf
. The other four terminals should be in use by December 2013, and the overall cost of the project to date is $1.5 billion.
According the Ruba Husari from the Iraq Oil Forum, Iraq is hoping to export 5 million barrels per day by 2014. Currently, production is at 2.9 million barrels per day, 1.6 – 1.7 million of which are exported. This year production should reach 3.4 million bpd and exports 2.6 million bpd according to Abdel Karim al-Luaybi, the Oil Minister.
Right now, roughly one-quarter of Iraq’s oil comes from northern fields and gets routed to Ceyhan, a Turkish Mediterranean port. In the wake of Iran’s threats about shutting down the Strait of Hormuz
, Iraq will open export routes for crude oil through Syria.
Image Credit: US Navy
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