Ministry of Oil: Plans to build a pipeline from Basra to the Sultanate of Oman
The State Oil Marketing Organization (SOMO) confirmed on Friday that the signing of memoranda of understanding with the Sultanate of Oman came due to its strategic importance in marketing Iraqi oil, while indicating that there is discussion regarding the construction of a complete pipeline from Basra to Oman. The company’s general manager, Ali Nizar Al-Shatri, said in a statement to the official agency, “The signing of memoranda of understanding with the Sultanate of Oman comes due to its strategic location for Iraqi crude oil and petroleum products, as Oman has an outlet on the Arabian Sea and another on the Arabian Gulf at its beginning, before the Strait of Hormuz. The result is that its presence will be closer to our crude oil customers, as most of our exports are directed to Asia, and thus Asian customers will be able to load crude oil from those locations instead of taking the long route.”
He added, “There are also technical issues. The more open the waters are, the less impact bad weather will have. However, our ports in Basra suffer from bad weather, which forces us to halt exports. Therefore, going to Amman means going to an open region, and exports from there are more stable and consistent with our customers, while reducing the chances of disruption.”
He also pointed out that “discussions are open regarding the construction of a complete pipeline from Basra to Amman, which would achieve multiple outlets and increase export capacity, and would give Iraq the potential referred to by the Prime Minister regarding increasing quotas and production ceilings. This can only be achieved with the presence of local export and consumption capacity, and this was noted in the Prime Minister’s speech regarding increasing investments in the refining sector, which is important, while export capacity depends on the available export outlets.”
He continued, “Oman will play a major role in this area if the pipeline and tanks upon which the memoranda of understanding were signed are completed, as well as the commercial process, which is not without marketing aspects. The result is that when oil is stored in Oman, there is a cost that has been incurred, and this cost must be recovered. Iraq needs additional profits to recover the costs, and this can only be achieved through commercial integration.”
Al-Shatri explained: “This is why another memorandum of understanding was signed for trade integration between Iraq and the Sultanate of Oman, between the State Oil Marketing Organization (SOMO) and OQ Trading Company, an Omani state-owned company that has proven itself globally and internationally. We are currently in the process of discussing the details of the contracts, because the memoranda of understanding set the general roadmap, but we need the details of the contracts to complete them.”
Burathanews.com