June 6 2023 8:50 AM E-paper Newsletter Subscribe Sign in My Account Sign out

Iraq-Jordan pipeline still polarizes stakeholders

An army personnel stands on guard at the Jordan-Iraq border crossing in this undated photo (Photo: JNews)
AMMAN — While experts agree that the Basra-Haditha-Aqaba oil pipeline was hindered by consecutive misfortunes, such as the Gulf War, the US invasion of Iraq, sectarian war, the rise of Daesh, and most recently the COVID-19 pandemic, they also agree that the abating of these challenges will not necessarily allow the project, which has been decades in the making, to finally become a reality.اضافة اعلان

“This pipeline is not a new idea, I conducted a feasibility study on the project in 1986. Over time, the project changed bit by bit and today we are looking at challenges, yet solutions are also available,” said Khalid Shamari, director of AlKhuld Center think tank.

Despite these delays, the project remains on the agenda of both Jordanian and Iraqi decision-makers.

The political front

“The United States should put its weight behind a north-south energy corridor, in which Iraq serves as an energy hub between ever-friendlier Gulf states and Turkey, ultimately forming an export bridge to Europe. Washington should also support the Basra-Haditha-Aqaba pipeline project to bring Iraqi oil and gas to Jordan,” James F. Jeffrey, former US ambassador to Iraq and Turkey, argued in a paper published in the Washington Institute for Near East Policy in 2018.

His argument was based on the fact that Iraq has only one outlet to export its oil, which is through Iran, leaving the war-torn country dependent on its neighbor.

Three years later, Jordan and Iraq are revisiting the idea of the Basara-Aqaba oil pipeline. However, the megaproject does not come without both internal and external opposition.

Iranian influence in Iraq was identified by experts as a major challenge facing the project.

An oil expert based in Baghdad who preferred anonymity, told Jordan News, that “Iran seeks to isolate Iraq from its neighbors to keep it dependent on its energy and maritime gateway.”

“The Iranian influence inside Iran is clear. Tehran is using soft power in economic, political and social spheres and still has the last word on projects such as this one, which might be rejected by Iran’s agents in Iraq,” Jassem Mohammad, director of the European Centre for Counterterrorism and Intelligence Studies, told Jordan News.

“There are some in Iraq who would oppose any attempts to better Iraq’s relations with its neighbors. Those are usually influenced by the Iranian stances. The start point for the oil pipeline would be on the southern region of Iraq, bordering Iran, where there will be a need to reach certain understandings with Iranian agents to be able to operate,” said Moyad Windawi, a strategic security expert.

“This project serves the interests of both Iraq and Jordan and it could create a sort of political and economic stability to Iraq,” Shamari said.

“This is a very important project, it is expected to last for the next 50 years. Regarding funding, the situation in Iraq is hard nowadays, and some wouldn’t want this project unless it is privately funded,” the Windawi said.

The security front

Although Daesh saw a defeat in Iraq, some believe that the terrorist group still operates through scattered cells.

“The security situation in Iraq remains fragile, because of the political rivalry between factions ... The project passes through areas in Western Iraq, Al Anbar-Haditha, a geographic area that is extremely hard to secure. These areas still harbor Daesh cells,” Mohammad said.

The analyst pointed out that some stakeholders and actors may deem this project to contradict their interests, and thus may mobilize armed agents to disrupt and sabotage the pipeline.

On the other hand, Shammari believes that the security situation is better than it was a few years back. “Things are more stable now and the security threats are minimal,” he said.

Windawi dismissed the threats of sabotage, saying that they are “not a big issue”.

The economic front

The pipeline, if it manifests, is expected to transfer 1.5 million oil barrel per day to the port of Aqaba. Experts estimate that Jordan could make around $2 per barrel in transport fees. The pipeline would run over 1700KM and is estimated to cost around $14 billion.

A research paper published on the website of the Iraqi Bayan Center for Planning and Studies in 2020 quoted the former minister of transport, Amir Abdul-Jabbar, as saying: “There are no economic returns for Iraq from this pipeline, but Jordan will benefit from it because the cost of exporting oil through the southern ports does not exceed 10 cents per barrel, while the cost of exporting through the proposed pipeline is $4.5 per barrel. This is in addition to losing returns and revenues from ships, and maritime agencies and services, which will benefit the investors.”

Likewise, Gary Vogler, author of “Iraq and the Politics of Oil: An Insider’s Perspective”, told Forbes Magazine in 2020: “I personally do not see the economic driver to install such an expensive project, especially now that we have the pandemic. But even before the pandemic, such a project would have poor economics.”

Windawi believes that Iraq’s economy is already in a dire condition. “The economic situation in Iraq is difficult and finding the finances might be tough.”

Shamari believes that the solution for funding the pipeline is through a Build-Operate-Transfer (BOT) formula.

“These companies [that carry out the BOT contract] will get their return on investments in several years and then they will transfer the project to the state, however, I don’t think Jordan will make steps on the grounds unless they see Iraq doing the same,” he concluded.