- Title: ISRAEL: First oil delivery from disputed Kurdish pipeline set for Israel
- Date: 20th June 2014
- Summary: ASHKELON, ISRAEL (JUNE 20, 2014) (REUTERS) VARIOUS OF IRAQI CARGO SHIP CARRYING CRUDE OIL AT SEA, VIEWED FROM ISRAEL'S ASHKELON PORT VARIOUS OF FISHERMEN AT SEA, SHIP IN BACK
- Embargoed: 5th July 2014 13:00
- Location: Israel
- Country: Israel
- Topics: General
- Reuters ID: LVAD7TYQD451GIAQBHK7MXT7Q4JP
- Story Text: An Iraqi ship anchored near Israel's Ashkelon port early on Friday morning (June 20), ship tracking and industry sources said on Friday (June 20).
Iraqi Kurdistan looked set to unload in Israel a first cargo of disputed crude oil from its new pipeline after weeks of seeking an outlet as Iraq's central government has threatened legal action against any buyer.
The SCF Altai tanker is expected to dock early on Saturday (June 21), local sources said.
Securing the first sale of oil from its independent pipeline to the Turkish port of Ceyhan is crucial for the Kurdish Regional Government (KRG) as it seeks greater financial independence from war-torn Iraq.
But the new export route to Turkey, built to bypass Baghdad's federal pipeline system, has created a bitter dispute over oil sale rights between the central government and the Kurdish Regional Government (KRG).
The United States, Israel's closest ally, does not support independent oil sales by the Kurdish region and has warned possible buyers against accepting the cargoes.
Israeli leaders have been alarmed in recent months, however, by signs of a possible rapprochement between Washington and Iran.
Officials said Israel was keen to build good ties with the Kurds, hoping to expand its limited diplomatic network in the Middle East and broaden options for energy supplies.
It was not clear whether the crude in the SCF Altai has been sold to a local refiner or was slated to discharge into storage, potentially for another destination.
Israeli refineries have taken Kurdish crude oil before but in small volumes, which were shipped to Turkish ports by truck. Some oil has also been stored there.
The KRG began exporting a small volume of its Taq Taq crude grade by truck to Turkey in early 2013 and then added another grade Shaikan at the start of this year.
Israel has less to lose than other U.S. or European refiners, because it has no contract for Iraqi oil. Iraq participates in the boycott of Israel along with many other Arab states.
Italy has warned traders and refineries about the legal risks of importing the oil. Large companies with oilfield interests in southern Iraq have stayed clear, although a joint refining venture by Rosneft used a cargo of trucked oil in May.
The KRG's pipeline is currently pumping around 120,000 barrels per day to Ceyhan. The region's natural resources minister is aiming to export 400,000 bpd by year-end.
Emboldened by its takeover of the major Kirkuk oilfield in northern Iraq, the KRG is also openly talking about the potential of exporting this oil through its pipeline as well after Kirkuk's usual pipeline outlet was sabotaged.
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