Kurdish crude sales to rise as exports reach second Turkish port
* Taq Taq crude exports to reach about 60,000 bpd by end June
* Kurdistan to start deliveries to second terminal in Turkey
* Crude in steady stream to Northern Europe
By Julia Payne and Peg Mackey
LONDON, May 22 (Reuters) - Iraqi Kurdistan's crude oil sales to world markets, deemed illegal by Baghdad, are set to rise by nearly 50 percent next month as trucks start deliveries to a second export terminal in Turkey, industry sources in the region said on Wednesday.
Crude exports from the Taq Taq oilfield in the autonomous northern region to Turkey's Mersin port started at a trickle in early January and have risen to just over 40,000 barrels per day (bpd).
They are expected to hit around 60,000 bpd by the end of June as trucks unload at the neighbouring Dortyol terminal in southern Turkey.
Oil lies at the heart of a feud between the central government and Kurdistan. Baghdad says it alone has the right to control exports and sign deals, while the Kurds say their right to do so is enshrined in Iraq's federal constitution.
In retaliation, Iraq's State Oil Marketing Organisation (SOMO) sent letters warning customers not to touch any oil that had not been marketed by SOMO and the ministry intends to sue producers, namely Anglo-Turkish firm Genel Energy.
Turkish intermediary Powertrans has found a steady stream of customers in Northwest Europe for its crude and condensate sales. Major oil firms with interests in southern Iraq have opted not to participate in tenders.
Germany's Select Energy lifted the first two Taq Taq cargoes in April. The grade is a light sour crude, a highly sought after quality.
One was delivered to Klesch's Heide refinery in northern Germany and the other discharged in Rotterdam.
Select is loading a third larger 80,000 tonne cargo.
Austria's OMV, already black-listed by Baghdad due to upstream stakes in Kurdistan, also bought one cargo in May, sources said.
Iraq's central government says Kurdistan is expected to provide 250,000 bpd towards Iraq's 2013 oil export target of 2.9 million bpd.
Adding condensate exports, the total amount of Kurdish oil exports would rise next month to nearly 80,000 bpd, or about 40 percent of the region's total oil production.
Kurdish oil had been exported through a Baghdad-controlled pipeline to Turkey before drying up last December due to a payment dispute between Arbil and Baghdad.
Moving oil to world markets by pipeline is far cheaper and logistically easier than via truck. Exports by truck are a temporary solution until the autonomous northern region completes its own pipeline to Turkey.
Exports via the new 300,000 bpd pipeline are unlikely to start before the year's end, a source familiar with the matter said, particularly as it is still not clear how it will join-up with existing Turkish infrastructure.
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