ISTANBUL (Reuters) - Turkey’s energy ministry has started technical work with Iraq’s central government on shipping crude oil from Basra in southern Iraq via the Kirkuk-Ceyhan pipeline to Turkey’s Mediterranean coast and on to world markets, its minister said on Friday.
The announcement came days after Iraq’s semi-autonomous Kurdish region said it might begin selling natural gas directly to Turkey within two years, a move that was expected to further strain Ankara’s ties with Baghdad.
“We have launched technical work with the Iraq central government on bringing Basra crude oil from Kirkuk to Ceyhan and from there to world markets,” the ministry quoted Energy Minister Taner Yildiz as saying.
No further details on the plans were immediately available.
Iraq is expected to provide the world’s largest expansion in oil export capacity in 2012 due to the opening of two floating single point mooring (SPM) terminals in the Gulf earlier this year. That increase is adding to global supplies as sanctions curb shipments from Iran.
The idea of shipping Basra oil via Turkey appeared to be new.
Iraq is the second-biggest market for Turkish exports, amounting to more than $8 billion last year, after Germany.
But Turkish officials have been locked in a war of words with Iraqi Prime Minister Nuri al-Maliki since December, when he ordered the arrest of Sunni Vice President Tareq al-Hashemi, based on allegations that he ran death squads.
Turkey, the majority of whose people are Sunnis, has accused Shi‘ite Maliki of stirring ethnic tension. The Iraqi prime minister has accused Turkey of meddling in its affairs.
In recent years, Ankara has also cultivated growing trade ties with the Kurdistan region in the north, which accounts for some 70 percent of Turkey’s exports to Iraq and would be Turkey’s eighth-biggest export market if it were a country.
Reporting by Evrim Ergin; Writing By Daren Butler, editing by Jane Baird