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 July 6, according to Reuters.
The announcement came days after the Kurdistan Regional Government (KRG) in northern Iraq 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 Yıldız as saying.
Speaking in the northwestern province of Edirne on June 6, Yıldız signaled private companies will be included in the project.
“The primary goal is to increase the capacity of the Kirkuk-Yumurtalık crude oil pipeline, and we have extended the agreement for 15 years,” Yıldız said, according to Anatolia news agency.
Turkey is interested in participating in developing and increasing the capacity of a 1,200-kilometer pipeline in Iraq, he added.
“Iraqi officials said their needs of petroleum products are not met,” Yıldız said, adding that the private sector could play a role in meeting such demands when the necessary official documents are obtained.
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.
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 has accused Shiite 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 KRG in the north, which accounts for some 70 percent of Turkey’s exports to Iraq.