Baghdad: Iraq is moving ahead with plans for a major new oil pipeline through Syria, but the project is likely to take several years before it can carry crude to the Mediterranean. The proposed pipeline is expected to cost at least $15 billion and could require about four years of construction, according to people familiar with the plans.
The project has gained importance as Iraq searches for safer and more reliable ways to export its oil during the continuing disruption around the Strait of Hormuz. The waterway has traditionally been one of the most important routes for Iraqi crude exports, but the conflict involving Iran has made shipping through the area much more difficult and uncertain.
The proposed pipeline would connect oil production in northern and southern Iraq with a major collection point near Haditha in western Anbar province. From there, the crude would travel through Syria to the Mediterranean port of Baniyas. The planned system could initially carry about 2 million barrels of crude oil per day, giving Iraq a major new export route outside the Gulf.
The project is also expected to be much more complicated than simply repairing an old pipeline. The previous pipeline linking Iraq to Baniyas was damaged during years of conflict and has remained out of regular operation for decades. Much of the old infrastructure is no longer suitable for modern operations. As a result, engineers are examining the construction of a largely new system rather than relying entirely on the damaged line.
A consortium involving American energy company Chevron, TI Capital and Qatar based UCC Holding is supporting the early feasibility work. The companies are studying the technical requirements, costs and possible routes before construction can begin. The final design and financing arrangements have not yet been completed.
For Iraq, the pipeline is part of a wider effort to reduce its dependence on one export route. The country has also been working to strengthen its northern connection to Turkey and the Mediterranean port of Ceyhan. Iraq and Turkey recently agreed to continue crude shipments through the pipeline linking the two countries, with exports targeted at at least 750,000 barrels per day.
The different projects show that Baghdad wants several options for reaching international markets. Its main oil exports have traditionally moved from southern terminals toward the Gulf and then through the Strait of Hormuz. The conflict has exposed the risks of depending so heavily on that route.
The proposed Syrian route would give Iraq direct access to the Mediterranean and could eventually become one of the country's most important export corridors. It could also provide Syria with a new source of transit income and help revive energy infrastructure that has suffered extensive damage during years of war.
Some oil movement between Iraq and Syria has already taken place by road. Iraqi fuel oil has been transported by tanker trucks toward the Syrian coast, demonstrating that the two countries can cooperate on an alternative route even before a large pipeline is built. However, road transport cannot match the scale or efficiency of a major crude pipeline.
The project could therefore have consequences well beyond the energy sector. A functioning pipeline would strengthen economic ties between Iraq and Syria and could encourage further investment in storage facilities, refineries, ports and other infrastructure. It could also increase the importance of Baniyas as a regional energy centre.
However, major challenges remain. Construction would require detailed engineering studies, financing, land agreements and security arrangements along the route. The Syrian section is particularly sensitive because the country is still rebuilding after years of conflict. Any changes in the political or security situation could affect the cost and timetable.
The expected four year construction period also means that the project will not provide an immediate solution to Iraq's current export problems. Baghdad will continue to depend on existing routes and temporary arrangements while the new infrastructure is being studied and eventually constructed.
The project nevertheless represents a major change in Iraq's long term energy strategy. Rather than relying on a single export corridor, Baghdad is looking to build a network of routes that can continue operating even when one major waterway or pipeline becomes unavailable.
If completed, the Iraq Syria pipeline could become one of the largest new energy infrastructure projects in the region. Its planned capacity of 2 million barrels per day would give Iraq greater flexibility in reaching international buyers and could reduce its exposure to disruptions in the Gulf.
For now, however, the project remains in its early stages. The immediate focus is on feasibility studies, technical planning and determining how the new infrastructure can be financed and built. The large cost and difficult security environment mean that the route from the first agreement to actual oil exports through Baniyas will be long.
Iraq's decision to pursue the project reflects a broader lesson from the current regional crisis. Energy security depends not only on how much oil a country produces, but also on how many reliable ways it has to deliver that oil to the world. The proposed route through Syria is intended to give Iraq exactly that additional choice, even if it takes years before the first barrels can travel through the new pipeline.