September 29, 2011 / 2:55 PM / 8 years ago

Iraq expects to pump oil from new Gulf terminal Jan 1

* Three single-point moorings to be ready by new year

* Export infrastructure limits hampering Iraq’s ambitions

* Offshore pipeline 90 percent completed

By Aref Mohammed

BASRA, Iraq, Sept 29 (Reuters) - Iraq expects to turn on the tap at one of three new oil export terminals in the Gulf on Jan. 1, a major milestone in its effort to build export capacity to handle increasing output from southern oilfields.

Construction on three single-point moorings (SPMs), linked to land near Basra by twin 60-km seabed pipelines, will be finished by the new year but only one will be put into operation immediately, Dhiya Jaafar, head of state-run South Oil Co., told Reuters on a trip to view work on the new export facilities.

The Gulf construction site was alive with work vessels, cranes and crews on Wednesday as contractor Leighton Offshore pushes to finish the $733-million project by year-end. Iraq is hungry for higher oil revenue as it rebuilds after years of war.

Export infrastructure limitations are a major impediment to its ambitious plans to tap the world’s fourth largest crude reserves and join the ranks of top exporting nations.

About 90 percent of the work on the offshore pipelines and about 60 percent of twin 8-km onshore pipelines had been completed, Jaafar said.

“The date of oil flow through the new SPMs will be the 1st of January 2012. We will start with one SPM and work will escalate,” Jaafar said in an interview aboard the South Oil Co. vessel “Rumaila” about 100 km offshore in the Gulf.

Having three new SPMs in operation would mark a significant increase in Iraq’s export capacity as BP , Exxon Mobil , Royal Dutch Shell (RDSa.L) and other global majors ramp up output at workhorse Rumaila, super giant West Qurna and other southern fields.

Iraq exported 2.189 million barrels per day (bpd) in August, 1.728 million of that from the two existing terminals off Basra.

Each of the new export moorings has a capacity of 900,000 bpd. Having all three in operation would give Iraq 2.7 million bpd of additional export capacity, more than doubling Basra’s current capacity.

ON SCHEDULE

At least 25 work ships lined the route to the SPM site on a sunny, steamy, 45-degree Celsius day with calm seas. Some of the vessels had cranes to lower sections of pipe and equipment into the sea.

One barge contained living quarters, kitchen and toilets for crews who stay at the site for up to a week at a time.

Crews were installing three seabed pumps at the site. Two of the massive pumps could be seen on the deck of a ship that idled nearby, a few kms from the Basra oil terminal, one of Iraq’s two existing platforms, where a tanker loaded crude for export.

Following the installation of the pumps, Jaafar said, Leighton and South Oil Co. crews will move the three SPM buoys from Dubai, where they were made ready for shipping, to Basra. Sections of pipe were being brought from Saudi Arabia.

“Work is going according to the timetable. So far 75 percent of the project has been completed. We hope the work will be accelerated in the last three months,” he said.

In addition to the Gulf terminals, Iraq exports around 500,000 bpd from its northern fields around Kirkuk, most of it by pipeline to the Turkish Mediterranean port of Ceyhan.

A leak forced Iraq’s North Oil Co to shut down the pipeline on Wednesday and it was not immediately known when exports would restart. [ID: nL5E7KS7D2]

Iraq has plans in place to build a third Gulf pipeline and a fourth SPM, while a fifth SPM is on its wish list.

“We would have an exporting capacity from the (five) SPMs of 4.5 million barrels a day. The current capacity is 1.7 million. So Iraq’s capacity to export would be around 6 million barrels a day from Basra alone,” Jaafar said.

Iraq signed a host of deals with oil majors to boost production capacity to 12 million bpd by 2017, but Oil Minister Abdul-Kareem Luaibi said recently that a plateau target of 8 million to 8.5 million would be more suitable and the period could be extended to 13 or 14 years. [ID: nL5E7KB0OB] (Additional reporting by Aseel Kami, Waleed Ibrahim and Aws Qusay; writing by Jim Loney; editing by James Jukwey)

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