Shafaq News- Baghdad/ Damascus
Iraq and Syria have entered thepreparatory phase of rehabilitating the Kirkuk-Baniyas oil pipeline, withtechnical, economic, and financial studies now underway alongside an assessmentof the condition of the line and its associated facilities, the state-runSyrian Petroleum Company told Shafaq News.
Two memorandums of understandingopened the phase, the company said, one concluded between the Iraqi and Syriansides, while the second with a coalition of international companies. TheAmerican firm Chevron, through an international consortium, will manage thetechnical and financial aspects of the rehabilitation.
Authorities in both countries arecoordinating on transport movement through border crossings and on technicaland security procedures, according to the company. On tanker traffic, it saidthe number of trucks crossing daily from Iraq into Syria through officialcrossings varies according to contracted volumes, operational needs andlogistical conditions, and that no precise figure could be given at present.
Condition And Cost
The line runs from Kirkuk, anoil-rich province in northern Iraq, to Baniyas, a port on Syria's Mediterraneancoast, and has been out of service since sustaining damage during the 2003US-led invasion of Iraq. Large sections have deteriorated in the years since,requiring a comprehensive technical assessment and replacement of numerouscomponents, though the existing route could be retained with modifications, Syrianeconomic researcher Ziad Arbash told Shafaq News.
He added that rehabilitationcosts are estimated at between 6 and 8 billion dollars, citing increases in theprices of construction materials and oil equipment alongside difficult economicconditions in both countries. “Financing through international partnerships,security guarantees against sabotage, and long-term export contracts are theprincipal conditions for the project's success,” he said.
Once operational, the pipelinewould carry an initial capacity of up to two million barrels per day, accordingto the US State Department, reconnecting Iraqi crude to export markets throughthe Mediterranean. Roughly 95 percent of Iraqi oil exports currently passthrough the Strait of Hormuz, the waterway at the mouth of the Gulf.
Projected Returns
Transit fees would generateannual revenues to Syria of between 150 and 200 million dollars, Arbash said,providing a sustained source of income for the public treasury. He said furtherexpected gains include crude supplied at lower prices to support the domesticenergy sector and to stimulate reconstruction projects, particularly if arefinery is built on the Syrian coast to meet local demand for refinedproducts, with surplus available for export to Lebanon.
Over the longer term, accordingto Arbash, the revenues could contribute to developing Syrian ports andmodernizing infrastructure tied to the energy and transport sectors. He namedrefining and energy, logistics and transport, and construction as the sectorslikely to benefit most, alongside supporting services.
The project would create directjobs in operations and maintenance and indirect employment in services with thepotential to attract new foreign investment following the lifting of sanctionson Syria's oil ministry in July of last year. “The line could serve as astarting point for future energy projects, including natural gas transportlines, reinforcing Syria's role as a regional hub for energy and associatedlogistics.”
Work will move to executiveagreements once the current studies are complete, the Syrian Petroleum Companysaid, with a schedule to be set jointly by the parties involved.
: Kirkuk–Baniyas Pipeline: Iraq’s direct oil lifeline to the Mediterranean