New oil facility helps Iraq boost crude exports as prices rise
Supertanker moors at new loading point off the country's southern coast
Iraq began using a new offshore crude-exporting facility to help boost shipments by sea and make up for a suspension of pipeline exports from the country’s north due to a conflict with the self-governed Kurdish region.
The supertanker Chloe, which can transport about 2 million barrels of oil, was moored at the new loading point in the Arabian Gulf off the coast of southern Iraq on Monday, according to shipping agent reports and Bloomberg tanker tracking. The oil minister Jabbar Al Luaibi said last week that southern exports would rise by 200,000 barrels a day to offset production that halted at some northern fields in the aftermath of fighting over disputed territory.
Oil prices inched up on Tuesday, getting support from a decline in oil exports from Opec's second-biggest producer Iraq and a projected extended fall in US commercial oil stocks.
London Brent crude for December delivery was up 5 cents at US$57.42 a barrel by 02.58 GMT after settling down 38 cents on Monday.
US crude for December delivery was up 5 cents at $51.95.
Iraq joined Opec and allied suppliers this year in cutting output to mop up a glut of crude that has depressed prices by half since 2014. That has not stopped the country from trying to boost its capacity to pump and sell oil; it aims to raise production capacity to 5 million barrels a day this year. Iraq currently pumps most of its 4.47 million barrels of daily output from fields in the south and ships them through the Gulf.
“The new loading point will help them boost exports,” said Jaafar Altaie, the managing director of the Abu Dhabi-based consultant Manaar Group, which operates in Iraq. The loading point, known as a single point mooring facility, or SPM, had been scheduled to start operating in December, and it is not at full capacity, he said. “The government started the SPM earlier than planned because they want to raise exports from Basra to compensate for the losses at Kirkuk.”
Iraq exported an average this year of 3.25 million barrels a day of its Basrah Light and Basrah Heavy crude via the Gulf. The Chloe is set to load a mixed cargo of Heavy and Light oil, according to the shipping agent report.
Iraq already operates three other SPMs, as well as four berths at its Basra Oil Terminal and another two at the nearby Khor Al Amaya terminal. When operating, the SPMs can pump about 900,000 barrels daily aboard tankers, but the time needed to carry out mooring and unmooring operations reduces their effective capacity to little more than half that amount. Bloomberg calculations show that the three older SPMs have loaded an average of about 480,000 barrels a day each since the beginning of 2015.
SPMs enable Iraq to pump crude to ships at sea without requiring that they dock in port. The country’s narrow coastline, hemmed in by Kuwaitto the south and Iran to the east, has little room for shipping berths. Its shallow waters are difficult for the largest tankers to navigate and contribute to traffic delays.
Federal Iraqi troops clashed last week with fighters from the semi-autonomous Kurdish region over disputed areas in Kirkuk province. Output halted at some sections of the giant Kirkuk oilfield after federal forces captured them from the Kurds and as some workers and guards stayed away from work.
Combined exports from Kirkuk and the adjacent Kurdish region rose to about 254,000 barrels a day by Monday from 213,000 barrels a day on Saturday. Iraq had been exporting close to 600,000 barrels a day on average this year from fields in Kirkuk and the Kurdish enclave, shipping them together through the same pipeline to Turkey’s Mediterranean port of Ceyhan.
Updated: October 24, 2017 10:03 AM