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Syria and Iraq have reached a final agreement to build two oil pipelines and a gas pipeline between their two countries, and tender invitations will be issued soon, Syrian Oil Minister Sufian Alao [Suffian Alao] (pictured) was quoted as saying on Tuesday.

Alao was quoted by Syrian newspaper Al-Thawra as saying an existing oil pipeline from Iraq to Syria was being repaired.

Platts reports that the pipeline, linking the northern Iraqi oil region of Kirkuk to the Syrian Mediterranean port of Banias, was shut down in the 1970s when relations deteriorated between the rival Ba'ath parties in power in Damascus and Baghdad.

Iraq reopened the line in 2000 to bypass UN sanctions, shipping some 200,000 bpd of Kirkuk crude to Syria, which used the crude in its own refineries and exported an equal amount of its own oil to markets.

The leaky pipeline, which has a capacity to carry 300,000 b/d of crude oil, has been shut since the US-led invasion of Iraq in March 2003, when the main K3 pumping station along the pipeline was damaged by US air strikes.

Alao did not say when work, which has already been delayed since initial agreement was reached to repair the pipeline in 2007, would be completed.

Iraq has said it plans to build three pipelines through Syria for heavy and light oil as well as natural gas to cope with new export capacity once incremental production comes on line from fields being developed by foreign oil companies under long term service contracts.

The heavy oil pipeline would likely transport heavy crude from the northern Qayara and Najmah oil fields, which were awarded to Angola's Sonangol.

The light crude oil pipeline would carry Kirkuk crude oil to Banias.

Iraq currently exports its Kirkuk blend crude oil to the Turkish port of Ceyhan, which lies to the north of Banias. There are plans to rehabilitate the existing Kirkuk-Ceyhan twin pipeline system, which has a design capacity of 1.6 million bpd, following a deal with Ankara to extend the transit agreement.

A senior Iraqi official said recently that while the Syrian pipeline option had been discussed for years, there was now movement on the issue with Baghdad seeking foreign investors for the projects.

One of the Iraqi gas fields awarded in last year's gas auction, Akkas, lies in the north near the border with Syria. The field, which is slated to produce 400,000 Mcf/d of gas when developed, has been earmarked as a potential source of exports in the future to the European market, possibly through the Arab Gas Pipeline that carries Egyptian Gas through Jordan, Syria and Lebanon and is being extended to the Turkish border.

Alao referred to plans to build a 56-inch pipeline with capacity to transport 110 million cu m/d of natural gas from Iran's South Pars gas field through Iraq and Syria, where it would link up with the Arab Gas Pipeline.

The agreement with Iran was reached during talks January 20 in Damascus last week with Iranian Oil Minister Masoud Mirkazemi. The two sides signed a cooperation agreement allowing Iranian gas exports through Syria and then on to Europe with the proposed pipeline.

Syria has been ramping up its gas production in recent years to meet high domestic demand. Alao said total gas output last year rose to 10.07 Bcm, up from around 9.1 Bcm/year in 2009. Syria produced an average 27.5 million cu m/d last year.

Because Syria cannot produce sufficient gas domestically, it has to rely on imports to meet rising demand for power generation as it phases out reliance on fuel oil. At present Syria is importing around 1.45 Bcm/year from Egypt but is seeking additional supplies.

Alao said that the electricity sector accounted for 87% of total gas usage, taking 6.704 million cu m/d of the 8.9 million cu m/d of clean gas supplied by gas processing plants.

Oil production rose marginally to a total 140.931 million barrels in 2010, an average of 386,000 b/d, a slight increase over 383,000 b/d produced the previous year, he said.

(Source: Platts)

Iraq’s Kirkuk province resumed power supplies to the national grid on Friday, after a deal that ended a dispute this week over the provision of electricity.

The oil-rich northern province that produces more electricity than it is allocated, announced on Monday that it would stop supplying power to the national network, a decision it implemented a day later.

According to a report from Lebanon's Daily Star, Electricity Ministry officials agreed on Thursday to immediately increase Kirkuk’s quota by nearly 50 percent, which still leaves the province woefully short of 24-hour power.

“Kirkuk has reached an agreement with the Electricity Ministry to reconnect the power stations in the province, and increase the province’s share from 170 megawatts to 250 megawatts,” said Kirkuk's Governor, Abdulrahman Mustafa, at a news conference on Thursday.

He added on Friday that the work of reconnecting the power stations had been completed.

According to a report from AFP, Iraq's northern Kirkuk province said it had stopped supplying electricity to the national grid on Tuesday, in a bold move to force the central government's hand in a dispute over power rationing.

"Kirkuk province has decided to cut the power going out from its electricity stations to other provinces and to keep the power for the province until the ministry of electricity does something about our power cuts," said the province's governor, Abdulrahman Mustafa.

Rizgar Ali, chairman of Kirkuk's provincial council, said the procedure of separating from the national grid was completed on Tuesday evening.

He complained that nothing had been done about the electricity situation in Kirkuk.

"Unfortunately, we didn't see any political step or intention from the government to help our people," he told AFP.

National Deputy Electricity Minister, Aamer al-Duri, earlier described the cuts as "illegal" as he said a ministry delegation had been sent to Kirkuk on Tuesday to try to resolve the dispute.

"Kirkuk is not the only province which suffers from power cuts," he told AFP. "It's the same for all provinces like Baghdad, Nineveh and others."

A Turkish energy company signed a deal with the Iraqi government on Thursday to build a power plant at a cost of $445.5 million [521 billion Iraqi dinars].

The deal between Turkey’s Calik Enerji and the Iraqi Electricity Ministry is for the construction of the 1,250 megawatt al-Hayrat [Khayrat?] plant in Karbala.

Calik Holding CEO, Ahmet Calik, and Iraq’s Deputy Electricity Minister, Salam Kazzaz, penned the agreement in a ceremony in Baghdad with the participation of Iraqi Deputy Premier for Energy, Hussain al-Shahristani, and Turkey’s Ambassador to Iraq, Murat Ozcelik.

Speaking at the ceremony al-Shahristani said the al-Hayrat plant would be biggest in Iraq when completed in two years time, adding that the plant would create 500 new jobs.

Al-Shahristani said the Iraqi government would open more tenders for the construction of two power plants in Mosul.

(Source: Turkish Press)

The chairman of Wasit [Wassit] council’s media department has said that the council has called on its citizens not to pay their electricity bills because they are too high.

The economic commission in the federal Council of Ministers directed the ministry of electricity last year to gradually increase the cost of consumer electricity in order to encourage the Iraqi public to be more responsible in their domestic consumption.

The head of Wasit’s media department, Al-Dahabi, told AKnews that the new prices were not commensurate with the income of most households in the province and so the recently distributed bills have been returned to the ministry unpaid.

Dahabi said that the council had received a number of complaints from electricity consumers as the domestic rates had doubled, and were not considered to correspond to the poor levels of service that Wasit citizens receive.

“The council will discuss this issue during its next meeting,” he said, then coordinate with the Ministry of Electricity to come up with a pricing formula “that doesn’t overburden the Iraqi citizen.”

Iraq plans to increase the country’s capacity to 27,000 megawatts over the next four years requiring an annual investment of between $3bn to $4bn.

(Source: AKnews)

Japan is ready to boost cooperation and projects in Iraq’s energy sector including rebuilding Iraqi nuclear reactor(s), Hussain Shahristani, Iraqi deputy prime minister for energy,has  told reporters.

Shahristani reportedly said after his meeting with the Japanese Economy, Trade and Industry Minister, Akihiro Ohata, in Baghdad, "we discussed the issue of reconstruction of the nuclear reactor(s) in Iraq... and the Japanese expressed their interest in that. Iraq will study the possibilities of developing its peaceful nuclear industry."

A joint statement was issued after the meeting calling on the two countries to reinforce economic cooperation in areas including postwar reconstruction, oil development and electricity generation in Iraq. Feasibility studies have already started to build an electricity generation station in Iraq, according to the statement.

Additionally, Japan will send a trade delegation to Iraq next month to discuss cooperation in the energy and transportation sectors.

This is the first visit to Iraq by a Japanese Cabinet minister since the Democratic Party of Japan (DPJ) took power in September 2009. Arab diplomats in Tokyo told PanOrient News that the DPJ "has not given Arab countries the attention they used to get from Liberal Democratic Party."

The Ministry of Electricity in Baghdad, in cooperation with consulting firm Parsons Brinckerhoff (PB), will present Iraq’s Long Term Electricity Master Plan at a 2-day conference in Istanbul on 1st and 2nd February, 2011.

The 2010 – 2030 Long Term Master Plan, prepared by joint teams from Parsons Brinckerhoff and the Ministry of Electricity's Planning and Studies Department, provides a long term road map for the future expansion of Iraq’s electricity program. The Master Plan Conference will present the findings and recommendations of the master plan report. Attendees will have the opportunity to interact with Ministry of Electricity and Parsons Brinckerhoff teams to discuss the latest issues facing the power sector in Iraq.

The Master Plan Conference has been organised in partnership with the US Embassy-Baghdad and is open to all interested parties.  Registration and attendance is free. More information and registration details are available at: http://www.iraqelectricitymasterplan.com.

Jeff Larkin, project director for Parsons Brinckerhoff’s role on the master plan, comments, “Development of this master plan has been a huge joint effort on the part of both PB and the Ministry of Electricity and has resulted in a detailed and comprehensive study and analysis of the many issues facing the power sector in Iraq. I’m confident the conference will be informative and constructive for attendees.”

Iraq's Ministry of Electricity has today issued a tender for the supply of 132KV cables.

Please click here to download details (in Arabic only).

The closing date for the receipt of bids is 26th January.

Iraq plans to almost triple power generation capacity to 17,000 MW by 2013, mostly through building new plants, Masaab Serri, an Electricity Ministry spokesman, told Bloomberg.

Iraq plans to invite bids later this year for the construction of three power plants to boost output by 1,500 megawatts, he said on Tuesday.

One plant is to be built in the Najibiyeh region in the southern oil hub of Basra, and two others in Nasiriyah and Haidariya in the central region of Najaf.

Iraq, holder of the world's fifth-largest oil reserves, is struggling to raise power supplies, which are currently at about 6,000 megawatts, or half of its domestic demand of about 12,000 MW, Serri said. Demand is expected to increase by at least 8% in 2012, he said.

Former Electricity Minister, Karim Wahid, quit in June amid violent street protests triggered by severe seasonal summer power shortages. Wahid said at the time that his efforts to overcome the problem had been thwarted by a lack of funding and fuel. Iraqis currently receive power from the national grid for an average of about one in every five hours.

Prime Minister Nuri al-Maliki pledged after forming his new government last month to address the electricity problem which is causing social problems and hurting economic activity.

Due to US sanctions, Iraq has been unable to pay Iran millions of dollars owed for electricity, an Iraqi official said, potentially damaging its efforts to supply enough power to a population suffering chronic shortages.

According to the report from Reuters, Adel Mahdi, an adviser to the electricity ministry, said on Wednesday that Iraq imports 650 megawatts of electricity from Iran and plans to boost imports to around 1,000 MW this year.

But due to US sanctions against Tehran over its nuclear programme, foreign banks have refused to transfer at least $200 million of overdue payments to Iran, raising fears among Iraqi officials that a cheap and vital power supply could be cut ahead of the sizzling Iraqi summer.

"I fear an indirect effect, that by summer maybe the debt on us will be half a billion (dollars) and at that time they (Iran) have peak demand... they could say 'we will have to eliminate the contract and stop'," Mahdi said in an interview.

"That would cause a very big problem to Iraq."

He said last year Iraq's peak power supply was about 6,500-7,000 MW, and demand was estimated at 14,000 MW during the summer when temperatures frequently exceed 50 Celsius and air conditioning units run constantly.

In 2011, supply is expected to rise to around 8,000 MW as new power plants and turbines go online.

But demand is also expected to increase to more than 15,000 MW as the country rebuilds an economy and infrastructure damaged by war, Mahdi said.

"The demand is still rising at high levels, the annual demand growth is around 8 to 10 percent," he said, "... which means this year... the shortfall will remain at around 50 percent."

Additional generation would remain limited in 2012 but people would start noticing a large increase the following year, he said.

(Source: Reuters)