Kurdistan begins commissioning new crude export pipeline: UK

[Aslan]

UK-listed Genel Energy said Wednesday that commissioning of the 300,000 b/d Kurdish oil export pipeline to Turkey has begun and should be complete by the end of 2013.

The new pipeline being built in Kurdistan links the Genel-operated Taq Taq field with the Baghdad-controlled Fishkabour metering station on the Iraq-Turkey border.

"The final phase of the independent oil pipeline infrastructure from Dohuk to Fishkabour is now complete and tied in to the Iraq-Turkey pipeline," Genel said in a statement.

"Pipeline commissioning is ongoing with line-fill of the Taq Taq to Khurmala section complete. Mechanical completion and full commissioning is still expected by end-2013," Genel said.

"Full oil export via the independent export infrastructure is still expected in Q1 2014."

Iraqi crude exports are currently marketed by state-owned SOMO and at present no Kurdish oil is being exported by pipeline because of a dispute between the KRG and Baghdad over payments.

Kurdistan has now begun construction of a new tie-in station near the Iraq-Turkey border that could result in oil exports outside of Baghdad's control.

Genel said it also expects to finalize a gas sales agreement for 10 Bcm/year with Turkey in the first quarter of 2014.

"The [Kurdistan] political landscape continues to evolve at pace," Genel CEO Tony Hayward said.

"The independent oil export pipeline is now complete and being commissioned, and we expect exports by pipeline in the first quarter of 2014. We completed our first domestic gas sales contract in the third quarter and anticipate the finalization of the gas sales agreement between Turkey and the KRG in the first quarter of 2014," Hayward said.

Genel, meanwhile, said gross production from Taq Taq averaged 85,000 b/d.

Trucked exports via Turkey averaged 29,000 b/d in the period, with the balance being local sales and deliveries to the Bazian refinery.

Genel said that Taq Taq export sales have been reconciled up to end-July and realized $75-80/b.