7 May 2003
A combination of rundown power infrastructure and war damage is forcing Iraq to import oil products to relieve severe shortages that have almost brought the country to a halt.
The first shipments of gasoline and liquefied petroleum gas from Turkey and Kuwait are due to arrive this week, Iraqi and US sources said. At the same time, the northern Baiji refinery resumed minimal operations on Tuesday.
“We are taking short term measures to bring in LPG from Turkey and both LPG and gasoline from Kuwait, while at the same we continue to work on fixing the system as a long-term solution,” Brig. Gen. Robert Crear, head of the US Army Corps of Engineers in Iraq, told International Oil Daily. His comments came after a meeting on Tuesday at the oil ministry in Baghdad that aimed at synchronizing operations across Iraq.
A 20-day supply of LPG cylinders will be trucked in from Turkey before the end of the week, while the first gasoline trucks were expected to leave Kuwait Tuesday or Wednesday at the latest, for delivery to a central warehouse and onward distribution to Baghdad gas stations.
“It’s too early to talk about total volumes but we want to bring it gradually to at least 400 trucks per day,” Crear said.
Crear, the commander of USACE’s southwestern division, who is overseeing the restoration of infrastructure across Iraq, said the US government will pay for the imports as part of the reconstruction and humanitarian assistance budget approved by the US Congress.
The aim is initially to bring in a 30-day supply of gasoline as an emergency shipment. More could be imported from other neighboring countries if needs persist, officials said. One option being looked at would be to pump gasoline into one of the product pipelines running from southern to northern Iraq, after being trucked across the border from Kuwait. However, inspections of the strategic north-south pipeline and other pipelines are still ongoing, and security is not guaranteed all the way from the south to Baghdad.
Iraqi officials said the 290,000 barrel per day Baiji refinery resumed operations Tuesday and is currently running at about 60,000 b/d. Crude is being pumped from northern oil fields in Kirkuk. With the resumption of runs at Baiji for the first time since the effective end of the war almost four weeks ago, total refining runs currently stand at a little over 170,000 b/d — way below Iraq’s normal capacity of about 550,000 b/d.
Crude production from the Baba dome in the Kirkuk field is currently in the range of 130,000 b/d, while production in the south stands at 85,000 b/d, Iraqi oil ministry officials said.
Bringing refineries back to their full capacity is contingent on restoring power to Baghdad and the northern region. Although officials from the US-led Office of Reconstruction and Humanitarian Assistance (ORHA) said power is restored 50% in Baghdad, Iraqi officials say levels are way below that. In Baghdad neighborhoods where power has been restored in recent days, outages remain frequent. In other areas, it has still not been restored.
At the ministry meeting on Tuesday, which was also attended by ORHA oil advisors and representatives of USACE contractor Kellogg, Brown and Root (KBR), the possibility of exporting fuel oil to Jordan, Syria, and possibly other countries was raised, as a way to relieve bottlenecks at refineries caused by the inability of power plants to draw on fuel oil stocks. No decision was made, however.
By Ruba Husari, Baghdad
(Published in International Oil Daily May 7, 2003)