Analysis: Oil and Gas Pipeline Watch

Recently restarted Kirkuk-Ceyhan pipeline blasted

The international oil market will still have to rely on Basra to supply Iraq’s oil exports as an apparent attack shuts down the Kirkuk-Ceyhan pipeline again.

The pipeline is key to increasing Iraq exports, providing the capacity to increased production. The Bush administration, during benchmark stump speeches last week, held up the newly reopened pipeline as a success story.

Iraq produced just less than 2 million barrels per day last month, according to estimates by the global energy information firm Platts. The country usually exports slightly more than three-fourths of what it produces. Most of that is coming from export terminals in Basra, in south Iraq, since attacks on the pipeline feeding oil to a terminal in Ceyhan, Turkey, has rendered it virtually useless.

Media reports are quoting sources on the ground that a pre-dawn bomb ripped open the pipeline between Kirkuk and Baiji, sending oil into the Tigris River, forcing water pumps in Tikrit and Baiji to shut down and threatening the supply into Baghdad.

Last month Iraq officials gave a hushed admission that the line had been repaired and oil was flowing to Turkey, most likely in test quantities, said Rochdi Younsi, Middle East analyst for the business risk firm Eurasia Group.

“They did say that they were completing a series of tests that appear to be promising, tests meaning that they were pumping a certain volume through the pipeline,” Younsi said. “But frankly no one expected the Iraqi government to make an announcement because doing that usually leads to an attack.”

Mexico AG says pipeline attacks not drug-related

Mexican Attorney General Eduardo Medina Mora said a series of pipeline attacks, dating back to June, are not linked to drug cartels looking to divert the attention of the police.

They are benefiting drug traffickers, Mora said, but "that doesn't necessarily mean they are linked."

The Xinhua news agency reports police forces assigned to anti-drug tasks are now investigating the bombings and securing the pipelines.

The Revolutionary People's Army has admitted responsibility, "to hit the interests of Mexican and foreign oligarchy."

India won't exit Iran pipeline deal after U.S. nuke pact

Kapil Sibal, India's union minister for science and technology, said the country has not retreated from a controversial gas pipeline deal with Iran and Pakistan, dubbed the Peace Pipeline.

"We are looking at different options and it is not desirable to put all the eggs in one basket," Sibal told United News of India.

India is now attempting to ink a nuclear deal with the United States that would ease U.S. and global restrictions on supply fuel and technology to its civilian nuclear program.

--

(e-mail: energy@upi.com)