Iraq opened a new Gulf crude export outlet in the southern oil hub of Basra, clearing the way for Baghdad to increase exports by around 300,000 barrels per day soon after crude begins loading. Loading at the Single Point Mooring or SPM outlet for tankers in the Gulf, part of Iraq's large-scale export facility expansion plan, has already been delayed several times by bad weather and technical hitches.
Oil will be pumped through offshore pipelines in a last test procedure before tankers start loading in a week to 10 days, the head of state-run South Oil Company, Dhiya Jaffar, told Reuters at an opening ceremony for the SPM.
"We expect that exports will increase not less than 250,000 or 300,000 barrels per day," he said. "The plan is to have the first oil inside the tanker within ten days."
If the project goes according to plan, exports from Iraq's southern oilfields will rise to around 1.9 million bpd by March and bring Iraq's total shipments to 2.3 million bpd, the highest level since the 2003 invasion that ousted Saddam Hussein.
Iraqi officials have said they are targeting 2.6 million bpd by May for total exports.
That will require monthly increase of 100,000 bpd in the south through mid-year when maximum rates of 2.2 million bpd are reached and exports from Iraq's north steady at 400,000 bpd.
The OPEC member has a $1.3 billion plan to expand its export facilities in the south, including two undersea pipelines, one offshore pipeline and four single-point mooring terminals.
Another SPM could be ready in three to four months, Jaffar said.
Iraq's infrastructure is outdated and lacks the capacity to handle increasing output from foreign companies such as Shell, Exxon and BP, who signed massive development contracts for its Rumaila, West Qurna-1 and Zubair oilfields.
Bringing three SPMs online by the end of the year would expand Iraq's export capacity in the Gulf by 2.7 million bpd, more than double Basra's current capacity. Its current Gulf terminals can handle around 1.7 million bpd.