Axis of Oil 2

Iran, Iraq to build 3 pipelines to exchange Iraqi crude for Iranian oil products
07.18.2005, 06:52 AM

TEHRAN (AFX) - Iran and Iraq are planning to build three pipelines, at Iran's expense, to cover Iraq's urgent need for petroleum and refined oil products, said Iranian Oil Minister Bijan Namdar Zanganeh.

Iraq will export crude oil to Iran, and Iran will transport petroleum and other refined products to Iraq, which is suffering from shortages in its petrochemicals industry, the minister told a press conference, attended by Iraqi Prime Minister Ibrahim Jaafari, who is visiting Iran.

Zanganeh said the agreement has not yet been signed, but the exchange will begin 10 months after it is signed.

'The plan is for Iran to buy 150,000 barrels per day of light crude from Basrah (in southern Iraq)', he said.

'In return, Iran will supply petroleum, gasoil and kerosene (to Iraq)', he said. 'The gasoil and kerosene will be supplied by the Abadan refinery (in Iran)', the minister added. The petroleum will be imported by Iran on Iraq's behalf.

'The Iranians will build two oil pipelines -- one to transport gasoil and kerosene from Abadan to Basrah, and another to transport crude from Basrah to the Iranian refinery.'

'A third pipeline will be built between the (Iranian) port of Mahshahr', near Abadan, 'to transport imported petroleum to Basrah' for Iraq, he said.

'The construction and the financing will be Iranian', the minister said. He did not give financial details of the deal.

Iraqi Oil Minister Ibrahim Bahr al-Ouloum, who was accompanying the prime minister on his visit, said on Saturday that a memorandum would be signed in the next few days: '150,000 barrels per day of crude will be transported from Iraq to Iran and 50 mln litres of refined products from Iran to Iraq. The project will be operational within a year.'

'For the moment, only Iranian companies are expected to take part in the reconstruction of the Iraqi oil industry,' he said.