Iraq will not offer Basrah Medium crude until Fao project complete: minister
Iraq’s long-mooted introduction of a Basrah Medium crude grade is contingent on the much-delayed expansion of the Fao export depot on the Persian Gulf, oil minister Thamir al-Ghadhban said.
Iraq’s State Oil Marketing Organization announced last year that it was mulling the launch of Basrah Medium, which would stabilize the quality of its current grades on offer — Basrah Heavy and Basrah Light — as more production is sourced from lower-quality oil deposits.
“This is very much linked not to the availability of oil but to the availability of enough storage,” Ghadhban said at an Iraq oil conference in London. “When we complete the Fao depot, there will be lots of tanks, and we will have the capability of separating grades.”
SOMO Deputy Director General Ali Nazar al-Shatari told Platts last year that Basrah Medium would have an API gravity of 29-30 degrees and 2% sulfur.
Both Basrah Heavy and Basrah Light are loaded from the country’s southern oil export terminals and single point moorings in the Persian Gulf.
The modernization and expansion of the Fao oil storage facility — more than five years behind schedule — is central to Iraq’s plans to boost its southern exports to 6 million b/d in 2023. They averaged 3.44 million b/d in May, according to the Iraqi oil ministry.
Japan’s Toyo Engineering is conducting a technical study and project audit of the Fao expansion plans, with results due by October.
The project had envisioned new pipelines, pumps and tanks that would allow the four installed single point mooring buoys to reach their export capacity of 900,000 b/d each, up from about half that now, and potentially add a fifth SPM.
“One major marketing strategy is to achieve stability in oil grade specification,” Ghadhban said Thursday at the conference. “We are heading to have more stable specification of exported crudes and to present more types of crude oil and satisfy more needs from our customers.”
He told reporters that Iraq was considering offering a light crude produced from the Yamama reservoir in West Qurna once its production ramps up.
“It is not immediate but it could be in the future a rather light crude,” he said. “It is an extensive reservoir in the southern part of Iraq and could generate more than 700,000 b/d.”