Iraq plans to start shipping crude from the first of its three new offshore export terminals in the Gulf at the start of February, a move that will boost its export capacity by 900,000 barrels per day, oil officials said. Increasing export capacity is a cornerstone of Iraq's ambitious plans to revive its oil industry after years of war, economic sanctions and neglect, and jump into the top ranks of global producers and exporters.
Iraqi officials had expected to open the tap at the first of three new single-point moorings (SPMs) on Jan. 1 but testing of new export pipelines has not been completed. Consultation between the oil ministries, the South Oil Company and project manager Foster Wheeler last week produced the new schedule, officials said.
"The final work of checking the new export pipelines and other export facilities linked to the first floating terminal is expected to be finished by the end of this month," Oil Ministry spokesman Asim Jihad said. Iraq's $1.3 billion export expansion project in the Gulf includes the construction of two undersea pipelines and one onshore pipeline, as well as four single-point moorings for loading tankers.
An engineer on the South Oil Company's export expansion project said the construction of the twin 60-km pipelines that will carry crude to the SPMs from shore had been completed but at least two more weeks were needed to finish testing them.
"We were supposed to finish work on the project earlier but we needed more time to do final checks for any possible leaks and to complete the installation of pipeline valves," the engineer told Reuters on condition of anonymity.
"We will definitely be ready to start exports at the first single-point mooring by the end of this month," he said.
The other two moorings will be installed by the end of the year, he said. Iraq's current export infrastructure is outdated and lacks the capacity to handle the expected large increases in production from its southern oilfields.
The Baghdad government has awarded a series of massive development contracts to foreign majors such as Shell, Exxon Mobil and BP, targeting output capacity of 12 million bpd by 2017. However, most analysts see 6 million to 7 million bpd as a more realistic goal.
Iraq is currently producing close to 3 million bpd while exports averaged 2.165 million bpd last year, according to the State Oil Market Organization.
Exports are expected to average 2.5 million bpd this year. Bringing the first three SPMs on line would boost Iraq's export capacity in the Gulf by 2.7 million bpd, more than doubling Basra's current capacity. Its two current Gulf terminals can handle around 1.7 million bpd. Iraq also has plans in place to build a third Gulf pipeline and a fourth SPM, while a fifth SPM is on its wish list.