Iraqi Gulf oil terminal start delayed again
Thursday, 23 February 2012 | 11:00
Bad weather has delayed the opening of Iraq's new Gulf crude outlet, sources said, further postponing a 300,000 barrel-a-day export boost that would ease a field-to-tanker bottleneck.
Iraq held an opening ceremony on Feb. 12 for the new Single Point Mooring, a buoy system that enables tankers to load crude while moored off the coast. Officials said then they needed up to 10 more days to complete the project and start pumping crude.
Nine days on, industry sources said they now expected operations near the southern oil hub of Basra to begin by the end of the month.
"Rough weather made it impossible for the crew to complete work at the floating terminal. We had to halt work in the past days," one industry source said on condition of anonymity because he was not authorised to talk to the media.
A vital component broke in choppy waters while workers struggled to connect the floating terminal to a pipeline on the sea bed below, the industry officials said.
"High wind shattered the 24-inch flexible part of the pipeline, which links the offshore part with the floating terminal, and this caused further delay," a source said.
It will take roughly two days to replace the flexible part of the pipeline and another four to connect the remaining elements and conduct checks before being able to pump crude, the officials added.
The new terminal is one of four Single Point Moorings that Iraq plans to put in place as part of a $1.3 billion effort to at least quadruple its export capacity within six years.
Each of the new moorings is due to add 900,000 barrels per day (bpd) in export capacity. The mooring currently being completed is, however, only expected to pump at around 300,000 bpd for the time being.
The completion of the first of the four planned moorings has been delayed repeatedly. It was originally due to open on Jan. 1, and the start of operations has been pushed back several times since.
Once it is operational, companies working at Iraq's southern oilfields will be able to increase production. They can pump more oil than the existing export terminals allow, although Iraqi officials have not said how big the bottleneck is.
A unit of Australia's Leighton Holdings is building the new terminal and two of the other three that are planned.
A source at the state-run South Oil Company said the project had been hampered by Iraqi officials' mismanagement as well as technical difficulties and bad weather.
Leighton, Australia's top contractor, said last week it had alerted the Australian Federal Police about possible bribery by its subsidiary working to expand Iraq's export capacity.
Iraq is currently producing close to 3 million bpd, while exports averaged 2.165 million bpd last year, according to the State Oil Market Organisation.
Exports are expected to average 2.5 million bpd this year.
Bringing the first three SPMs on line would boost Iraq's export capacity in the Gulf by 2.7 million bpd, more than doubling Basra's current capacity. Its two existing Gulf terminals can pump around 1.7 million bpd.
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