Baghdad (Agencies): The Prime Minister’s Office (PMO) revealed recently that the Iraqi cabinet has approved a $4.5 billion initiative to build the Basra-Haditha oil pipeline.
The planned pipeline would deliver crude oil to the central and southern parts of the country, according to a statement released recently by the Iraqi Oil Ministry. The new pipeline is expected to have a capacity of 2.25 million barrels per day.
Funded under the Iraq-China Framework Agreement, the project is being built by the state-owned Basra Oil Company (BOC) and State Company for Oil Projects (SCOP). A 56-inch, 685-kilometer crude oil pipeline was authorized by the Iraqi government at a discounted price of nearly $1.24 billion, which is 5.5 percent less than the original estimate.
High-quality materials will be used in the pipeline, which will take 720 days to complete and require Ministry of Oil permission before manufacturing. The project’s concept originated in the 1980s with the intention of strengthening Iraq’s capacity to export oil during the conflict with Iran and the potential closure of the Strait of Hormuz at that time.
Since Iraq, the second-largest producer in OPEC, exports around 90 percent of its oil through the Strait of Hormuz, any disruptions would have a negative impact on the country’s oil exports.