Basra-Aqaba oil route: Pipeline or pipedream?
Jordan's King Abdullah II, Egypt's President Abdel-Fattah Al-Sisi, and Iraqi Prime Minister Mustafa Al-Kadhimi met in Baghdad on Sunday for the second round of a trilateral summit between the three countries.
Among the 28 points discussed at the talks was a renewed commitment to the Iraq-Jordan Oil Pipeline (IJOP), which would run from the Iraqi city of Basra to the Jordanian port of Aqaba.
The proposed pipeline would cover a distance of almost 2,000 kilometers and transport one million barrels per day (bpd) to Aqaba. Iraq's oil minister and Egypt's ambassador to Egypt have also discussed extending the pipeline to Egypt, but no formal agreements have yet been made.
There have been discussions on developing the IJOP for nearly a decade but with little progress to show.
Security issues in Iraq, with the Islamic State group’s 2015 takeover of Anbar province, where the pipeline was meant to be built, have delayed the project's implementation, in addition to political foot-dragging.
If built, the project could benefit both Iraq and Jordan, particularly in electricity generation.
Iraq has a surplus of oil, but poor electrical infrastructure. In 2019, demand for electricity in Iraq was almost 60 percent higher than the available supply.
Conversely, Jordan has the capacity to produce surplus electricity for export but is heavily import-dependent for the fuel which it uses for electricity generation. Jordan imports nearly 94 percent of its energy supply.
Prior to the Iraq war, Jordan bought almost all of its oil from Iraq, as Baghdad would sell it for a third of its market price, in addition to allowing it to pay for oil in consumer goods which were then needed by sanction-laden Iraq.
Since then, Jordan has relied mostly on natural gas coming from the Arab Gas Pipeline (AGP) in Egypt and the Israel-Jordan offshore pipeline for its electricity generation needs. The latter of the two pipelines faces intense domestic opposition from the Jordanian public, the majority of which is of Palestinian origin, who oppose dealing with Israel.
The development of the IJOP could help Jordan cover some of its domestic fuel needs while allowing Iraq to benefit from Jordanian electrical generation. A planned project to connect Jordan and Iraq's electrical grids was signed in 2020, which, when completed, will allow Amman to directly export electricity to Iraq.
The project will also reduce Iraq's "strategic vulnerability that arises from its dangerous reliance on its export facilities [in] Basra", Jamie Ingram, a senior editor with Middle East Economic Survey (MEES), told The New Arab.
Ingram explained that because "all oil production in southern Iraq is shipped via the Strait of Hormuz", Iraq is left vulnerable to any future closure of the narrow waterway. "We've seen Saudi Arabia, the UAE and Iran construct pipelines to at least partially bypass Hormuz in order to reduce this threat," he said.
Further, constructing a link with Aqaba would involve "rehabilitating a stretch of pipeline linking Basra to Kirkuk in northern Iraq", allowing Iraqi oil produced in Basra to be exported to facilities in Ceyhan, Turkey, Ingram said.
Still, despite all the potential benefits of the pipeline, there has been basically no progress made on its construction since negotiations began in earnest in 2013.
The Middle East has a long history of lofty transnational energy sharing schemes which never leave the drawing board.
Iraq and Syria previously proposed rebuilding a defunct Kirkuk to Baniyas oil pipeline but the project was delayed indefinitely by the Syrian civil war. Similarly, in 2011, Iran, Iraq, and Syria tentatively agreed to build a $10 billion natural gas pipeline to stretch 1,500 km. That pipeline too, never materialised.
The IJOP has time to get off the ground, but "so far, it is the quintessential example of pipeline projects which have not come to fruition," Ingram said.