Iraqis Say Oil Flow Via Kirkuk-Ceyhan Link to Resume

By MarEx 2013-07-08 08:22:00

The flow of crude from Kirkuk in Iraq to the port of Ceyhan in Turkey will resume in two to three days after being interrupted for weeks due to a pipeline leak, two sources in Iraq's state-run North Oil Company (NOC) said on Monday.

Pumping through the pipeline has been suspended since June 21 because of the leak in the Ain al-Jahsh area, around 290 km (180 miles) northwest of Baghdad.

A senior Turkish energy official said Iraq had given notice flows would resume by Friday.

"Iraqi officials told Turkey that the flow on Kirkuk-Ceyhan pipeline will resume by Friday at the latest, but it is possible that it may be delayed until after Friday," the official said.

Flows through the pipeline, which has an official capacity of 1.6 million barrels per day (bpd), are regularly interrupted due to technical problems and attacks by insurgents.

"Every time we had a bomb attack, a quick fix was required to avoid disruption to exports from Ceyhan, but that's not working anymore as parts of the pipe have become like a sieve," an NOC official said on condition of anonymity.

Work on the pipeline was suspended last month after unidentified militants ambushed a repair crew, killing two technicians and two members of the oil police, NOC and Iraqi security sources said.

Security forces have since been sent up from Baghdad to provide cover for the repair team, and an oil ministry official said security measures along the pipeline would be reviewed.

Shipping and trading sources said loading of Kirkuk crude onto tankers at the Turkish port of Ceyhan had been halted for more than two weeks because there was not enough oil in storage there.

Typically, when the pipeline is idled, tanker loadings at Ceyhan can continue for a few days using stored oil, maintaining supplies to the Mediterranean market.

"The pumping had been very problematic over the past couple of months. Every single ship has had to wait for at least 2-3 days... the problem is on the Iraqi side," said a Ceyhan-based shipping source, adding that eight tankers were currently waiting to be loaded.

The stoppage contributed to a decline in OPEC member Iraq's June oil exports to 2.328 million bpd from 2.484 million the previous month, short of its 2.9 million bpd target for 2013.

Iraq has the world's fourth-largest oil reserves and is targeting exports of 6 million bpd by 2017, which would see it overtake its neighbour and fellow OPEC member Iran.

By Mustafa Mahmoud; Additional reporting by Alex Lawler in London, Humeyra Pamuk and Orhan Coskun in Ankara; writing by Isabel Coles; Editing by Anthony Barker (C) Reuters 2013.