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

Analyst: Joint-Arab Military Force Poses Perilous Challenge

Although international forces are desperately needed to counter the threat of the Islamic State group, analysts say conflicting alliances could escalate fighting More

Asia’s Middle Class Changes Demand for Wheat Grain Exporters

Changes in tastes and diets are boon for wheat exporters such as Australia and the United States More

S. African Comedian Taking Over Popular TV Show

Mixed-race comedian Trevor Noah, who is loved for his edgy jibes about race and language, is taking the helm from Jon Stewart at The Daily Show in US More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Film Tells Story of Musicians in Mali Threatened by Jihadistsi
X
Greg Flakus
March 30, 2015 6:48 PM
At this year's annual South by Southwest film and music festival in Austin, Texas, some musicians from Mali were on hand to promote a film about how their lives were upturned by jihadists who destroyed ancient treasures in the city of Timbuktu and prohibited anyone from playing music under threat of death. As VOA’s Greg Flakus reports from Austin, some are afraid to return to their hometowns even though the jihadists are no longer in control there.
Video

Video Film Tells Story of Musicians in Mali Threatened by Jihadists

At this year's annual South by Southwest film and music festival in Austin, Texas, some musicians from Mali were on hand to promote a film about how their lives were upturned by jihadists who destroyed ancient treasures in the city of Timbuktu and prohibited anyone from playing music under threat of death. As VOA’s Greg Flakus reports from Austin, some are afraid to return to their hometowns even though the jihadists are no longer in control there.
Video

Video With Coalition Airstrikes, Iraq Entering 'Last Page' of IS Battle

American warplanes joined Iraq's battle against the so-called 'Islamic State' in northern Iraq late Wednesday, as Iraqi ground troops launched a massive assault on Tikrit. Analysts say the offensive could take the coalition a step further towards Mosul, the largest city held by Islamic State forces. Others say it could also deepen already-dangerous sectarian tensions in the region. VOA's Heather Murdock has more from Cairo.
Video

Video Philippines Wants Tourists Spending Money at New Casinos

Tourism is a multi-billion dollar industry in the Philippines. Close to five million foreign visitors traveled there last year, perhaps lured by the country’s tropical beaches. But Jason Strother reports from Manila that the country hopes to entice more travelers to stay indoors and spend money inside new casinos.
Video

Video Civilian Casualties Push Men to Join Rebels in Ukraine

The continued fighting in eastern Ukraine and the shelling of civilian neighborhoods seem to be pushing more men to join the separatist fighters. Many of the new recruits are residents of Ukraine made bitter by new grievances, as well as old. VOA's Patrick Wells reports.
Video

Video Islamic State Prisoners Talk of Curiosity, God, Regret

Islamic State fighter, a prisoner of Kurdish YPG forces, asked his family asking for forgiveness: "I destroyed myself and I destroyed them along with me." The Syrian youth was one of two detainees who spoke to VOA’s Kurdish Service about the path they chose; their names have been changed and identifying details obscured. VOA's Zana Omer reports.
Video

Video Germanwings Findings Raise Issue of Psychological Testing for Pilots

More is being discovered about the co-pilot in the crash of Germanwings Flight 9525 in the French Alps. Investigators say he was hiding a medical condition, raising questions about the mental qualifications of pilots. VOA's Carolyn Presutti reports.
Video

Video Hi-tech Motorbike Helmet's Goal: Improve Road Safety

In cities with heavily congested traffic, people can get around much faster on a motorcycle than in a car. But a rider who is not sure of his route may have to stop to look at the map or consult a GPS. A Russian start-up company is working to make navigation easier for motorcyclists. Designers at Moscow-based LiveMap are developing a smart helmet with a built-in navigation system, head-mounted display and voice recognition. Zlatica Hoke has more.
Video

Video DOJ: Illinois National Guard Soldier Tried to Join ISIS

U.S. federal law enforcement agents arrested two suburban Chicago men accused of trying to join ISIS overseas, while also plotting attacks in the United States. As VOA’s Kane Farabaugh reports from the Midwest state of Illinois, one of those arrested is a soldier of the Illinois National Guard.
Video

Video New Wheelchair Is Easier to Use, Increases Mobility

Traditional push-rim wheelchairs create a lot of stress for arm, shoulder and neck muscles and joints. A redesigned chair, based on readily available bicycle technology, radically increases mobility while reducing the physical effort. VOA’s George Putic reports.
Video

Video Liberia's Almost Last Ebola Patient Grateful but Still Grieving

Beatrice Yardolo was to make history as Liberia’s last Ebola patient. Liberians recently started counting down 42 days, the period that has to go by without a single new infection until the World Health Organization can declare a country Ebola-free. That countdown stopped on March 20 when there was another new case of Ebola, making Yardolo’s story a reminder that Ebola is far from over. Benno Muchler reports from Monrovia.
Video

Video Cambodian Land Grabs Threaten Traditional Communities

Indigenous communities in Cambodia's Ratanakiri province say the government’s economic land concession policy is taking away their land and traditional way of life, making many fear that their identity will soon be lost. Local authorities, though, have denied this is the case. VOA's Say Mony went to investigate and filed this report, narrated by Colin Lovett.
Video

Video Space Program Status Disappoints 'Last Man on the Moon'

One of the films that drew big crowds last week at the annual South by Southwest festival in Austin, Texas, tells the story of the last human being to stand on the moon, U.S. astronaut Eugene Cernan. It has been 42 years since Cernan returned from the moon and he laments that no one else has gone there since. VOA’s Greg Flakus reports.

VOA Blogs

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More