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Crude test flows begin on Iraqi Kurdistan-Turkey pipeline-sources

ISTANBUL, Dec 14 (Reuters) - Test flows in Iraqi Kurdistan’s new crude oil pipeline via Turkey started on Friday, but no exports have yet been scheduled, energy sources close to the matter said on Saturday.

Turkey and Iraqi Kurdistan signed a multi-billion-dollar energy package in late November, infuriating Baghdad which claims sole authority over oil exports and is wary of any move that could extend political autonomy in the region.

Turkey has lobbied hard to have Baghdad, which claims any oil deals the Kurdistan Regional Government (KRG) has signed are illegal, on board but so far the central government has not shown any signs of stepping back.

“These are the test flows in limited amounts,” an industry source told Reuters. “The volumes are not high enough yet to say exports have started,” he said.

He added that it showed both Turkey and the KRG were on track to implement the multi-billion dollar oil and gas deals they signed last month.

“Turkey has repeatedly showed that it wants a comprehensive agreement that includes Baghdad as well, but it has also said it will stand by its agreement with the Kurds,” the source said.

The Turkish-KRG deal has enormous significance for major oil companies as well as for the Kurds and Turkey, which can benefit in domestic supply and onward westward export through the mediterranean port of Ceyhan.

Baghdad says it has sole authority over Iraqi oil exports, while the KRG says it has the right to sell the oil independently and has recently built its own pipeline to export crude to Turkey.

Turkey, which is heavily dependent on imports to satisfy its growing appetite for energy, wants Iraqi Kurdistan’s oil to help diversify its energy supplies. (Reporting by Humeyra Pamuk, Orhan Coskun and Evrim Ergin; Writing by Daren Butler; editing by Patrick Graham)

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