Jordan, Iraq agree on oil pipeline deal on hold since 2013

Jordan says Iraq has agreed to go ahead with oil pipeline deal
2 min read
10 January, 2022
Jordan's energy minister announced on Monday that Iraq had approved a pipeline deal which has been in the talks for years
The pipeline, if built, would have large benefits for both Jordan and Iraq [Getty- archive]

Jordan's energy minister on Monday announced Iraq's approval to extend a crude oil pipeline to Jordan's only coastal city.

The project - initially discussed in 2013 but never materialised - is part of plans to open up new markets for Iraqi oil and will grant Jordan the right to purchase 150,000 barrels a day.

The pipeline will extend from Iraq's southern city of Basra to the Jordanian port city of Aqaba.

It will span 1,665 km in length, transport at least one million barrels of crude oil a day, and cost between $7 to $9 billion, according to Iraqi estimates.

If built, the project could benefit both Iraq and Jordan, particularly in electricity generation, experts say.

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Jordanian Energy and Mineral Resources Minister Saleh Al-Kharabsheh saidon  Monday that his Iraqi counterpart, Ihsan Abdul-Jabbar Ismail, informed him by phone of Baghdad's final approval of the deal with technical and legal teams directed to carry out the work.

While the agreement was reached in April 2013, Iraq announced in 2019 it was reconsidering the feasibility of the entire project to see how it could benefit best from the deal.

Baghdad had considered extending the pipeline to reach Egypt, instead of ending it in Aqaba, to increase returns from the project.

Iraq - which remains largely unstable due to years of conflict - produces an average of 4 million barrels of crude oil each day, ranking it sixth on a global scale.

Despite its surplus of oil, the country has very poor electrical infrastructure. In 2019, demand for electricity in Iraq was almost 60 percent higher than the available supply.

Blackouts in summer due to energy shortages have sparked protests in the country.