Iraq, holder of the world’s fifth- biggest crude reserves, agreed to build pipelines across its shared border with Jordan to increase supplies of oil to its western neighbor, Iraqi State Minister Ali al-Dabbagh said.
The countries agreed also to discuss development of the Risha natural-gas field on their common border, al-Dabbagh said at a news conference in Baghdad today.
“Iraq and Jordan have agreed in principle to build a pipeline network to carry crude oil to the refinery in Zarqa,” a town to the northeast of the Jordanian capital Amman, he said after talks in Baghdad between Jordanian Prime Minister Samir Rifai and his Iraqi counterpart Nuri al-Maliki. Iraq supplies Jordan now with 10,000 barrels of oil a day.
The proposed pipeline marks another step in Iraq’s effort to rebuild and reintegrate itself into the regional economy, after suffering for years from war and sanctions. Iraq’s government plans early this year to invite bids for the construction of oil and gas pipelines into Syria, to complement its existing export link for crude terminating at the Mediterranean port of Ceyhan, Turkey.
“Iraq currently provides crude oil by trucks to Jordan, and these quantities are not enough for the Jordanian market,” said al-Dabbagh, who also is the Iraqi government spokesman.
Rifai’s talks with the Iraqi prime minister focused on political and economic cooperation, mainly in the energy sector. The leaders discussed collaboration in the electricity industry and the possible joint development of the Risha gas field lying mostly within Jordan, the spokesman said.
BP’s Commitment
BP Plc agreed in October 2009 to join Jordan’s state-owned National Petroleum Co. to explore and develop Risha, which covers an area of about 7,000 square kilometers (2,700 square miles).
BP plans to spend $237 million to increase output at the field within three to four years, according to the agreement. The London-based company may spend an additional $8 billion to $10 billion to boost production from the field to 330 million cubic feet a day from the current level of 21 million cubic feet a day.
Jordan’s government seeks to attract investments of $14 billion in energy infrastructure. It forecasts that domestic fuel consumption will increase to 10 million metric tons of oil equivalent by 2020, up one third from today’s 7.5 million tons. The government expects electricity consumption to almost double within 10 years to 5,200 megawatts.