Chevron Advances Iraq-Syria Pipeline Plan to Bypass Strait of Hormuz

Chevron is advancing a pipeline network linking Iraq and Syria after the closure of the Strait of Hormuz disrupted crude exports.

Chevron and the Iraqi government are in late-stage talks to build and rehabilitate a pipeline system extending into Syria, the Financial Times reported on July 16. Chevron has formed a consortium for the project with a US investment firm and a company owned by the Al-Khayyat brothers, billionaires with Syrian and Qatari ties.

The project is designed to create a direct route for crude from southern Iraq to the Mediterranean. The plan calls for a pipeline linking southern Iraqi oil fields with Kirkuk, Iraq's northern oil hub. A second line would then run from Kirkuk across Syria to the Mediterranean coast, using parts of an aging existing pipeline network.

Tom Barrack, the US ambassador to Turkey and a close ally of President Donald Trump, was also involved in discussions on the project, the report said. Chevron is also due to sign a memorandum of understanding this week to develop two large oil fields in southern Iraq.

The project would help Iraq reduce its dependence on the Strait of Hormuz for crude exports. Iraq, OPEC's second-largest producer with output of 4 million barrels a day, has cut production by more than half since the war between the US and Iran. The Iraqi government is rushing to secure alternative export routes as the conflict hits the economy.

Saudi Arabia, the United Arab Emirates and other Middle Eastern countries are also expanding pipelines that bypass the Strait of Hormuz to bolster oil export capacity. Even so, pipelines remain vulnerable to drone and missile attacks on pumping stations, storage facilities and terminals, meaning they are not immune to conflict.

Military clashes between the US and Iran have entered a second week. US attacks have expanded beyond military facilities to civilian infrastructure including airports, railways and ports. Iran has also broadened its retaliation across the Gulf, escalating the conflict. Warnings are also mounting that the era of free passage through the Strait of Hormuz may be ending and that a larger permanent US troop presence could become unavoidable.

Kim Mi-ri, Hankyung.com reporter mirimiri@hankyung.com