IRAQ - Logistics.

For it to become one of the biggest oil exporters, Iraq will require huge investment in logistics. These will have to include mega terminals on Iraq's Persian Gulf coast, on the east Mediterranean coast in addition to Ceyhan in Turkey, and on the Red Sea. Baghdad will need US help in getting the Saudi government to return to Iraq ownership of a major crude oil pipeline passing through Saudi territory and ending just north of Yanbu', on the Red Sea, as well as ownership of its terminal.

Before the latest war, conditions at Iraq's existing storage, pipelines, terminals and loading facilities had deteriorated due to lack of equipment and spare parts. Apart from problems faced by shippers at the Mina Al-Bakr and Khor Al-Amaya oil terminals offtakers had to pay directly to the Iraqi authorities port charges of up to $18,000 worth of euros per loading.

Iraq now does have the capacity to export 3.5m b/d of crude oil. But experts at the Oil Ministry stress that Iraq's Gulf terminals need extensive modernisation and most of their facilities should be replaced.

The Kirkuk-Ceyhan pipeline was expanded from 1.1m to 1.6m b/d in 2001 with the re-opening of a parallel line. Repair of two berths at the deep-water Khor Al-Amaya terminal in the Gulf was done in 2001. But the officials say the terminal still needs a lot of work and modernisation to be done.

Under Saddam, Baghdad had been planning to expand the capacity of Mina Al-Bakr and Khor Al-Amaya terminals to 3.2m b/d, as a minimum, but work on this was to begin after the UN sanctions. It was also planning to have a large fleet of crude oil and products tankers. Saddam's government said in 2000 it intended to lay two to three 42/48-inch crude oil pipelines (120-130 km) between new storage depots and a rebuilt Fao terminal and complete a second north-south strategic pipeline. It was said the latter project required some 230 km of 42-inch line and expansion of the first pipeline's four pumping stations (see background in Vol. 52, No. 19).

The 18-42-inch strategic pipeline system, built in the 1970s and expanded with a 42-48-inch twin line in the early 1990s, should have a capacity of 1.4m b/d to pump crude oils from Rumaila in the south to the northern pipeline system or vice-versa, giving Iraq flexibility to shift exports either way.

This line's length is 760 km, consisting of 655 km from the Rumaila fields to Haditha in the north and 105 km from Rumaila to Fao in the south. Storage facilities at Fao are linked by marine pipelines to Mina Al-Bakr and Khor Al-Amaya. The line's main pump station, K-3 at Haditha, and three intermediate stations were nearly destroyed in the 1991 war. K-3 was repaired and put in operation in November 1991. The other stations were repaired in 1992. But the whole system needs modernisation.

The Iraq-Syria pipeline, which until late March 2003 pumped Kirkuk crude oil from Haditha to Syria's Mediterranean terminal at Banias, was re-opened in late 2000 after repairs. It was not approved by the UN, and from late 2000 the US kept pressing Syria to stop it. The pipeline was on March 27, 2003, ordered shut from Haditha by US Defence Secretary Rumsfeld, who warned Syria to stop helping Saddam against US forces. Now Syria is facing serious trouble (see APS Diplomat's news19bbSyriaLebanonMay9-05).