Foreign investors mull renewing Iraq-Haifa oil pipeline

The pipeline will require a $1 billion investment.

Sources inform "Globes" that a number of foreign consortia, consisting mostly of US investors, recently contacted Israeli government agencies and government company Petroleum and Energy Infrastructures with proposals to renew the oil pipeline to Iraq. The pipeline runs from Iraq through Jordan to Haifa Bay.

Former Minister of Energy Adv. Moshe Shahal heads one of the consortia. Shahal declined to respond to the report.

The projected renewed pipeline will follow the same route as the old one, which operated decades ago. A completely new pipeline must be laid for the purpose, with a much larger diameter than the current 12-inch pipeline. A 40-42-inch pipeline is needed in order to transport large quantities of oil.

The pipeline is designed to transport oil from Iraq to the Zarqa oil refinery in Jordan, and from there to the oil refinery in Haifa Bay. The pipeline will eliminate the need to use the Suez Canal, which has limited ability to handle large numbers of oil tankers. Excess oil reaching Israel can be transported by tanker from the Haifa fuel terminal to other countries around the Mediterranean, and in Europe.

Fuel arriving from the Iraq will be stored in a terminal at Kiryat Haim, at least until the planned relocation of terminal to a site near the oil refinery in Haifa Bay, on the northern side.

Petroleum and Energy Infrastructures, which also operates the Kiryat Haim terminal, is responsible for the fuel port in Haifa Bay, the old oil pipeline, and the route of the new pipeline. Petroleum and Energy Infrastructures CEO Rafi Taterka and Boris Ladar, manager of the Kiryat Haim terminal and fuel port, are promoting the new pipeline on behalf of the company.

Ladar believes that in the initial stage, ten million tons of oil can be transported from Iraq to Israel through the new pipeline. For the sake of comparison, Oil Refineries refines twelve million tons of oil a year in Israel: most of the fuel products consumed there.

According to Ladar, the Kiryat Haim terminal can meet the storage requirements if a new pipeline from Iraq is built. Taterka estimated that a $1 billion investment would be needed to renew the pipeline.

Published by Globes [online] - - on March 2, 2005

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