News / Middle East

Turkey, Iraqi Kurdistan Clinch Major Energy Pipeline Deals

FILE - Kurdistan RaKurdistan Regional Government Natural Resources Minister Ashti Hawrami (R) shakes hands with Turkey's Energy Minister Taner Yildiz during a joint news conference in Arbil, about 350 km (217 miles) north of Baghdad, May 20, 2012.
FILE - Kurdistan RaKurdistan Regional Government Natural Resources Minister Ashti Hawrami (R) shakes hands with Turkey's Energy Minister Taner Yildiz during a joint news conference in Arbil, about 350 km (217 miles) north of Baghdad, May 20, 2012.
Reuters
Iraqi Kurdistan has finalized a comprehensive package of deals with Turkey to build multi-billion dollar oil and gas pipelines to ship the autonomous region's rich hydrocarbon reserves to world markets, sources involved in talks said on Wednesday.

The deals, which could have important geo-political consequences for the Middle East, could see Kurdistan export some 2 million barrels per day (bpd) of oil to world markets and at least 10 billion cubic meters per year of gas to Turkey.

Such a relationship would have been unthinkable just a few years ago, when Ankara enjoyed strong ties with Iraq's central Baghdad government and was deep in a decades-long fight with Kurdish militants on its own soil.

But Turkey imports almost all of its energy needs and growing demand means it faces a ballooning deficit, making the resources over its southeastern border hard to ignore.

During a visit to Istanbul last week by Kurdistan Regional Government (KRG) Prime Minister Nechirvan Barzani, both sides agreed on the fundamentals of the deals and mapped out technical details for a second oil pipeline and a gas route from Iraq's north to Turkey, sources involved in the talks said.

“It is official and it is historic,” a source close to the deal said. “For years, Turkey has deliberately avoided getting involved in northern Iraq but now it is the beginning of a new period. It was a bold but a very necessary move.”

Turkey's courtship of Iraqi Kurds has infuriated Baghdad - which claims sole authority to manage Iraqi oil and says Kurdish efforts towards oil independence could lead to the break-up of Iraq. It has also raised concern in Washington.

Under Iraq's constitution, all oil export revenue goes through Baghdad. The autonomous Kurdish region is entitled to 17 percent of the total, a windfall that has helped it flourish as a prosperous oasis safe from the violence that consumed the rest of Iraq in the decade since a U.S.-led invasion.

The Kurds say all of Iraq will benefit if they develop their region's own resources. But Baghdad fears that if the Kurds obtain separate export capacity they will seek independence.

Turkey has repeatedly said it respects Baghdad's sensitivities and will not take any steps that would further deepen the long-standing dispute between the Arab-led central government and the Kurdish-run enclave.

Pipeline for heavy oil

Kurdistan has struck deals with firms including U.S. oil giant ExxonMobil, Chevron and Total as it seeks to develop its energy industry.

Ankara has set up the Turkish Energy Company (TEC), a state-backed entity which has struck partnership deals with Exxon and will be Turkey's counterparty in dealings with Kurdistan.

A first KRG-sponsored oil pipeline, which is almost complete, will link up to an existing Iraq-Turkey pipeline and begin carrying Kurdistan's oil to world markets from December, sources familiar with the project say.

The existing pipeline from Kirkuk to Turkey's Mediterranean port of Ceyhan is currently carrying only a fraction of its 1.6 million barrels per day (bpd) capacity, and could in theory pump up to 700,000 bpd of Kurdistan's oil.

But as Kurdish output grows, with several new fields coming online this year and next, a second pipeline will be needed.

“The second pipeline will be mainly for the heavy oil that will come from the northern fields. Taq Taq and Tawke crude is very high quality and blending the two grades would depreciate the value of both crudes,” the source close to the deal said.

Turkish state pipeline company Botas will be instrumental in building the second pipeline, a government source said. A private Turkish company is also interested in the project.

The new pipeline will have a capacity of at least 1 million bpd of crude oil, KRG natural resources minister Ashti Hawrami said in Istanbul last week. The exports will be metered independently, he said, inviting all parties including Baghdad to send auditors to observe the process.

Revenues will be paid into KRG accounts, a source familiar with the plans said. Hawrami has repeated the KRG's readiness to send 83 percent of the income to Baghdad after deducting the autonomous region's share. Baghdad views such plans as illegal.

“The KRG says this oil belongs to all Iraq and they are happy to share it. There is also a bit of a hope that the reality on the ground will force Baghdad to make a deal on this,” the source said.

Gas deal

While oil has been the focus of attention, Turkey's interest in OPEC member Iraq is also due to its rich gas reserves.

Turkey is set to overtake Britain as Europe's third biggest power consumer in a decade and is hostage to expensive Russian gas. It also buys natural gas from Azerbaijan and Iran and liquefied natural gas from Algeria but is looking to diversify.

With the new pipeline from Kurdistan, Turkey will be able to import at least 10 billion cubic meters (bcm) per year of Kurdish gas more cheaply than from current suppliers, sources said, with its total capacity potentially up to double that.

“Turkey's existing infrastructure is almost ready for this tie-up. Northern Iraq will build its own pipeline, but Turkey could be instrumental here as well and Botas could play a role,” the government source said.

A gas purchasing agreement between TEC and Kurdistan is expected to be signed in December, sources familiar with the project said. Construction of the pipeline and gas processing plants, anticipated to cost billions of dollars, could start next year, with the first flow of gas targeted for early 2017.

Anglo-Turkish firm Genel Energy, headed by former BP chief executive Tony Hayward, is expected to be the first company to export gas to Turkey from its Miran and Bina Bawi fields, which contain sour gas.

Shipping the natural gas to European markets through a link to the Azeri-controlled Trans-Anatolian natural gas pipeline (TANAP) is another option, a second government source said.

You May Like

WHO: Anti-Ebola Efforts Should Focus on West Africa

Official says WHO is 'reasonably confident' countries bordering those hardest hit by the Ebola outbreak are not seeing the virus crossing their borders More

South Sudan Crisis Threatens Development

Economic costs and lost development opportunities in South Sudan have erased what little progress the country has made since independence in 2011 More

Ukraine PM Warns Russia May Try to Disrupt Sunday Poll

Arseniy Yatsenyuk orders full security mobilization for parliamentary election to prevent ‘terrorist acts’ from being carried out More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
After Decades of Pressure, Luxembourg Drops Bank Secrecy Rulesi
X
October 21, 2014 12:20 AM
European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video After Decades of Pressure, Luxembourg Drops Bank Secrecy Rules

European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video Kobani Refugees Welcome, Turkey Criticizes, US Airdrop

Residents of Kobani in northern Syria have welcomed the airdrop of weapons, ammunition and medicine to Kurdish militia who are resisting the seizure of their city by Islamic State militants. The Turkish government, however, has criticized the operation. VOA’s Scott Bobb reports from southeastern Turkey, across the border from Kobani.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video US ‘Death Cafes’ Put Focus on the Finale

In contemporary America, death usually is a topic to be avoided. But the growing “death café” movement encourages people to discuss their fears and desires about their final moments. VOA’s Jerome Socolovsky reports.
Video

Video Ebola Orphanage Opens in Sierra Leone

Sierra Leone's first Ebola orphanage has opened in the Kailahun district. Hundreds of children orphaned since the beginning of the Ebola outbreak face stigma and rejection with nobody to care for them. Adam Bailes reports for VOA about a new interim care center that's aimed at helping the growing number of children affected by Ebola.
Video

Video Young Nairobi Tech Innovator on 'Track' in Security Business

A 24-year-old technology innovator in Nairobi has invented a tracking device that monitors and secures cars. He has also come up with what he claims is the most robust audio-visual surveillance system yet. As Lenny Ruvaga reports from the Kenyan capital, his innovations are offering alternative security solutions.
Video

Video Latinas Converting to Islam for Identity, Structure

Latinos are one of the fastest growing groups in the Muslim religion. According to the Pew Research Center, about 6 percent of American Muslims are Latino. And a little more than half of new converts are female. VOA’s Carolyn Presutti travelled to Miami, Florida -- where two out of every three residents is Hispanic -- to learn more.
Video

Video Exclusive: American Joins Kurds' Anti-IS Fight

The United States and other Western nations have expressed alarm about their citizens joining Islamic State forces in Syria and Iraq. In a rare counterpoint to the phenomenon, an American has taken up arms with the militants' Syrian Kurdish opponents. Elizabeth Arrott has more in this exclusive profile by VOA Kurdish reporter Zana Omer in Ras al Ayn, Syria.
Video

Video South Korea Confronts Violence Within Military Ranks

Every able-bodied South Korean male between 18 and 35 must serve for 21 to 36 months in the country’s armed forces, depending upon the specific branch. For many, service is a rite of passage to manhood. But there are growing concerns that bullying and violence come along with the tradition. Reporter Jason Strother has more from Seoul.
Video

Video North Carolina Emerges as Key Election Battleground

U.S. congressional midterm elections will be held on November 4th and most political analysts give Republicans an excellent chance to win a majority in the U.S. Senate, which Democrats now control. So what are the issues driving voters in this congressional election year? VOA National Correspondent Jim Malone traveled to North Carolina, one of the most politically competitive states in the country, to find out.
Video

Video Comanche People Maintain Pride in Their Heritage

The Comanche (Indian nation) once were called the “Lords of the Plains,” with an empire that included half the land area of current day Texas, large parts of Oklahoma, New Mexico, Kansas and Colorado.The fierceness and battle prowess of these warriors on horseback delayed the settlement of most of West Texas for four decades. VOA’s Greg Flakus reports from Lawton, Oklahoma, that while their warrior days are over, the 15,000 members of the Comanche Nation remain a proud people.
Video

Video Turkey Campus Attacks Raise Islamic Radicalization Fears

Concerns are growing in Turkey of Islamic radicalization at some universities, after clashes between supporters of the jihadist group Islamic State (IS) or ISIS, and those opposed to the extremists. Pro-jihadist literature is on sale openly on the streets of Istanbul. Critics accuse the government of turning a blind eye to radicalism at home, while Kurds accuse the president of supporting IS - a charge strongly denied. Henry Ridgwell reports from London.

All About America

AppleAndroid