Bagdad plans oil line to Jordanian port

Press, 25 May 1984, Page 6

Bagdad plans oil line to Jordanian port

NZPA-AFP Amman, Jordan

The Iraqi Oil Minister, Mr Ahmad Kassem Taki, said yesterday that if Iran fulfilled its threat to close the Strait of Hormuz, Gulf oil could still be exported via the Saudi Red Sea port of Yanbu.

He told Agence FrancePresse that countries outside the region could also increase their output to stave off a world supply crisis.

Closing the strait would be a technically difficult and suicidal act for Iran, because the world had enough oil reserves to last out three or four months, and “many parties who cannot accept the closure” would have enough time to reopen the waterway. “Iran’s intransigence” in the Gulf war could force Iraq to destroy the Kharg Island terminal, through which Iran exported virtually all its oil, in order to force a peaceful settlement in the conflict, Mr Taki said.

He arrived in the Jordanian capital on Monday for talks with Jordanian leaders on a project to build a transjordanian oil pipeline to carry Iraqi oil to Jordan’s Red Sea port of Aqaba. He confirmed that

negotiations were under way with the United States construction firm, Bechtel, to build the pipeline, and that a definite contract could be signed by the end of June, provided Bechtel, “guarantees the project’s specific conditions.” Questioned about reports that Israel had agreed not to oppose the project, he replied, “Obviously we have not asked Israel for any guarantees.” He said that the pipeline, which Jordanian sources have said will stretch 950 km would cost SUSI billion. Mr Taki said that the Jordan pipeline did not mean that plans to build an Iraq-Saudi Arabian pipeline would be scrapped, because Iraq had to take strategic considerations into account. Iraq, which can produce up to four million barrels of oil a day, has only one pipeline open, across Turkey.

The rate of flow is 900,000 barrels a day and is scheduled to reach a million barrels a day within the next few months. Mr Taki put Iraq’s reserves at 65 billion barrels.

In Manama, Bahrain, Western diplomats and oil industry executives said that Iran’s oil exports had fallen about half — from 1.8

million barrels a day to fewer than one million — since Iraq began stepping up attacks against Kharg Island.

Iran's oil exports from Kharg have been its chief source of finance for its 44-month-old war with Iraq. Iran has given no official export figures, but its production quota agreement with the Organisation of Petroleum Exporting Countries is 2.4 million barrels a day, of which 600.000 to 700,000 goes for domestic consumption. Shipping sources said that tanker crews recently returned from Kharg had reported gaps of two to four days between tanker arrivals. That was consistent with exports of much less than one million barrels a day from Kharg. since the largest tankers calling there can carry just over two million barrels. Iran's only other oil terminal of significance is Lavan Island, farther south, with daily exports of about 150.000 barrels. Oil industry sources said that Japan. Iran's main customer. had already cut purchases from Iran. Tokyo traders said yesterday that Japan was importing about 200,000 barrels a day. down from 450.000 last vear.