Construction of Iraqi oil pipeline through Syria may take 4 years and cost $15B

Iraq's plans to export oil via a pipeline through Syria to avert future disruptions in the Strait of Hormuz will likely require four years of construction and cost at least $15 billion, sources with knowledge of the project told Reuters, Report informs.

US officials and energy executives are billing ‌the plan, which is receiving initial support for feasibility studies from a consortium including Chevron, as part of a strategy to reduce the industry's reliance on a waterway that has been largely shut by the Iran war.

"Over the next two years, the strait is going to become irrelevant. It is going to become just another body of water," US Treasury Secretary Scott Bessent said last week.

While a fifth of the world's oil and liquefied natural gas was shipped through Hormuz before the conflict, Bessent said "more than 50% or 70%" of those exports would instead be exported via underground pipelines.

But two sources directly involved in the project told Reuters the plans for the Iraq-Syria pipeline would take twice that long due ⁠to the need for new infrastructure and could face other hurdles.

A pipeline linking Iraq's northern Kirkuk region to Syria's Mediterranean port of Banias already exists but was badly damaged by wars in Iraq and Syria and has not been in regular use since the 1980s.

Both sources said the plan would require laying entirely new infrastructure rather than rehabilitating the existing pipeline and cost at least $15 billion.

While part of the new pipeline would run largely along the same Kirkuk-Banias route, intact sections of that pipeline are not compatible with newly developed specifications and would be unusable, one of the sources said.

The second source said the project would include developing an entirely new integrated crude oil pipeline system that would link Iraq's southern and northern fields to a central ‌hub in ⁠Haditha in western Iraq, then onwards to Banias.

The US has welcomed the "rehabilitation and reconstruction" of the pipeline, saying it will have initial transport capacity of 2 million bpd of crude oil.

That would imply a major expansion of the old pipeline's capacity of about 300,000 bpd, which is less than a tenth of the oil volume Iraq exported through the Strait of Hormuz before the Iran war.

Both sources said work on the Iraq-Syria pipeline would take around four years, though one added that the timeline may also ⁠need to accommodate clearing old infrastructure and acquiring fresh land use rights from Syria's new administration.