Thursday, May 23, 2013

(This article was first published on Wednesday)

By Summer Said

ABU DHABI--State-run Trade Bank of Iraq will participate in building the country's first oil export pipeline in decades, which will make the country less dependent on Persian Gulf export terminals, its president and chairman said Wednesday.

"We will be among the group of investors taking part in this mega project...which will boost Iraqi crude exports to Asia, Europe and the United States," Hamdiyah Al Jaff said on the sidelines of an energy conference in Abu Dhabi.

"The estimated value of the pipeline alone is more than $12 billion. The part inside Iraq will cost around $3 billion, which we will participate in financing," Ms. Al Jaff said.

Iraq last month invited oil companies to demonstrate their interest in building the 1,680-kilometer pipeline stretching from the oil hub of Basra in southern Iraq to the Jordanian port of Aqaba in the Red Sea after the two countries signed a preliminary agreement.

The member of the Organization of the Petroleum Exporting Countries hopes the pipeline will make it less dependent on Persian Gulf export terminals, providing the country with an alternative route if Iran closes the Strait of Hormus.

Tehran has threatened on several occasions to close the strategic waterway through which 35% of the world's shipborne oil is exported, most recently in response to international sanctions over its suspect nuclear program.

Iraq last year started design and feasibility studies on the 680-kilometer part of the pipeline inside its borders, Nihad Mousa, a director general at the Iraqi oil ministry said last month. It's expected to carry 2.25 million barrels a day when it starts operations in 2017.

The country is now preparing to start work on the section from Haditha to Aqaba, with a capacity of 1 million barrels a day. The third part of the project, running to Syria's Banias port in the Mediterranean, has been postponed because of the conflict in the neighboring country. It would have a capacity of 1.25 million barrels a day. The total cost of the entire project is estimated at $18 billion, Ms. Al Jaff added.

Iraq sits on some of the world's largest oil reserves and was once a major exporter of crude. It's now trying to rebuild an industry that was devastated by years of war and sanctions.

Write to Summer Said at summer.said@dowjones.com

(END) Dow Jones Newswires

23-05-13 0327GMT