Iraq and Jordan Agree to New Oil Pipeline

Iraqi State Minister, Ali al-Dabbagh, said Iraq agreed to build pipelines across its shared border with Jordan to increase supplies of oil to its western neighbour, according to a report from Bloomberg.

The countries also agreed to discuss development of the Risha natural-gas field along their common border, the minister told a news conference in Baghdad on Monday.

“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.

In 2008, the two countries signed a three-year agreement to supply Jordan with 10,000 barrels of Iraqi oil at a discount of $22 per barrel less than the international market price. The amount covers about 10% of Jordan's energy needs of around 100,000 bpd.

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.

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