Iraqi Kurdistan poised to export oil to world markets via Turkey

PanARMENIAN.Net - Iraqi Kurdistan will be ready to export its crude oil directly to world markets via Turkey within months after a new pipeline is completed, a move likely to deepen a row with Baghdad over the distribution of Iraq's hydrocarbon revenues, Reuters said.

The Kurdistan Regional Government (KRG) is on track to finish the pipeline in the third quarter, linking Genel Energy's Taq Taq oilfield with an existing Iraq-Turkey crude pipeline, four Turkey-based industry sources told Reuters.

Turkey has given the green light to the plan, under which oil from Taq Taq will enter the Kirkuk-Ceyhan pipeline at Fishkhabur pumping station near the Turkish border, from where it will flow directly to Turkey's southern port of Ceyhan for shipping to international markets, the sources said.

The move will help Kurdistan significantly increase its oil exports but could upset the Iraqi central government, which sees independent exports from the north as illegal and says growing trade between the KRG and Turkey threatens to split Iraq.

The new pipeline was originally designed as a gas pipeline but KRG Energy Minister Ashti Hawrami said it was to be converted to carry oil, a move which had helped Genel Energy to bring its plans of pipeline exports by 2014 forward, sources said.

Sources said the pipeline has been laid up to Dohuk and is currently 80 percent complete. It will be able to carry up to 300,000 barrels per day (bpd) and is being built by a Turkish contractor.

Kurdistan crude used to be moved to world markets through a Baghdad-controlled pipeline to Turkey, but exports via that channel dried up last year as a result of a row over payments.

Crude pumped from the Taq Taq oilfield has instead been trucked over Iraq's northern border with Turkey, bypassing Iraq's federal pipeline system.