Monday, April 26, 2010

Iran hopes to sign Iraq oil pipeline deal

Iran hopes to sign a deal with Iraq to build an oil export pipeline from Iraq’s southern city of Basra within a month, an Iranian diplomat said on Sunday.

The plan for a pipeline from Iraq’s southern city of Basra to Iran’s Abadan refinery is not new, as both OPEC members signed an initial agreement in 2005.

But the agreement has been on hold since then, stalled by violence unleashed after the 2003 U.S.-led invasion.

The revived plan to export Iraqi crude was now being reviewed by Iraqi officials, Ali Heidari, the trade attaché at the Iranian embassy in Baghdad, told Reuters.

“We gave a draft of the agreement to the Iraqi side... It is in its final stages, it could be signed within a month,” he said.

Under the 2005 preliminary deal, Iraq was to export 150,000 barrels per day of crude through twin pipeline and Iran was to send gasoline, gas oil and kerosene to Iraq in return.

But Heidari said the new plan includes exporting Iraqi crude “through Iranian regional waters”. Using the pipeline to send refined products from Iran back to Iraq could be added later.

“We have an agreement but it was not activated, which is to export crude oil from Iraq to Iran to refine it and send back. The Iraqi side put that part as a second stage,” he said.

Iraq, which has the world’s third-largest oil reserves, signed a series of deals with global oil firms that could quadruple its crude output capacity to around 12 million barrels per day. Iraq has plans to expand its oil exporting facilities in anticipation of the rise in output.

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