Iraq-Turkey pipeline requires ‘costly’ renovation: KRG PM advisor

ERBIL, Kurdistan Region - The Iraq-Turkey pipeline has surpassed its lifespan and will require “costly” renovation if the Kurdistan Region’s long-stalled oil exports are to resume, an energy advisor to the Region’s prime minister said on Tuesday.

“The suspension of the Iraq-Turkey Pipeline, which is a strategic Iraqi line, started in 1973 - meaning it is more than 50 years old,” said Kamal Atroshi, energy advisor to Prime Minister Masrour Barzani and the Kurdistan Region’s former minister of natural resources.

Oil exports from the Kurdistan Region through the Iraq-Turkey pipeline have been suspended since March 2023 after a ruling by a Paris-based arbitration court ruled in favor of Baghdad against Ankara, saying the latter had violated a 1973 pipeline agreement by allowing Erbil to begin exporting oil independently in 2014.

“Normally and under international standards, the lifespan of oil pipelines is between 40 to 50 years. After that period, it becomes very old and needs special maintenance, which entails very high costs. Basically, the contract was for 50 years and has expired for that pipeline,” he explained.

Atroshi noted that the line is not beyond use, but any future operation would require extensive repair and favorable terms for both Iraq and Turkey.

“If an agreement is made to renovate that pipeline again, it has the capacity to work and its maintenance and repair costs and transit fees… are economically suitable for both sides, then it's possible. It's a very strong possibility,” he said. “Certainly, this also has great benefits for Turkey.”

Gas

Atroshi said that gas is undoubtedly complementary to oil, estimating 30 to 35 trillion cubic feet in the Kurdistan Region’s fields.

“Those fields that have been discovered so far, such as Khor Mor, Chamchamal, Banabawy, Miran, Topkhana, and Kurdamir, it's possible that all of them together contain around 30 to 35 trillion cubic feet, and this is still an estimate.”

Two major energy contracts were signed in Washington between the Kurdistan Regional Government and US-based HKN Energy and WesternZagros in May. They were valued at a combined $110 billion over their lifespans. However, Baghdad has rejected these deals, deeming them illegal.

Iraq relies heavily on Iranian gas imports to operate its power plants. Baghdad now is seeking to export electricity from Turkey and Gulf countries. It already buys electricity from the Kurdistan Region.

The main gas producer in the Kurdistan Region is the Khor Mor field in Sulaimani province which produces 452 million standard cubic feet of gas per day, according to Dana Gas.

“So far, we have expertise in one field, which is the Khor Mor field. The Khor Mor field, I believe, produces 450 million cubic feet daily and has the potential to reach one billion. If we combine everything, meaning we add Chamchamal and Miran as well, then it becomes approximately 1.5 billion cubic feet, which is a significant amount,” Atroshi said, adding that extracting gas requires different expertise than oil.

Iraq and the Kurdistan Region also do not make use of the majority of the gas produced in oil fields, leaving it to flaring which has led to substantial financial losses and pollution.

In the past decade, the amount of associated gas flared in Iraq and the Kurdistan Region has increased by over 39 percent. Despite all efforts to reduce it, the latest report by the World Bank and Sky Truth on global gas flaring indicate that the amount still exceeds 18.02 billion cubic meters per year.­

“What is the best way for this production to continue without loss and waste? This question fundamentally depends on the capacity and competence of those companies that carry out the gas production process,” Atroshi said.

The remarks come as Iraq and Turkey discuss the future of the pipeline and a possible new energy partnership. Last week, the Iraqi oil ministry said Ankara had officially expressed its willingness to renew and expand the 1973 oil export agreement with Baghdad. Turkey has confirmed sending a letter to Baghdad that included a draft of a broader energy cooperation deal covering oil, gas, petrochemicals, and electricity.

The current agreement, first signed in 1973 and most recently renewed in 2010, is set to expire in 2026 unless either side issues a termination notice one year prior. Iraq’s state gazette had earlier announced that Turkish President Recep Tayyip Erdogan would not renew the deal, prompting further clarification from Turkish officials that they do intend to move forward with a new version of the agreement.

In May, Turkish Energy Minister Alparslan Bayraktar said the pipeline has the capacity to carry 1.5 million barrels of oil per day and that Ankara is interested in expanding energy trade with Iraq, particularly involving the oil-rich southern province of Basra.

Sangar Abdulrahman contributed to this report.