UPDATE 1-Turkey importing crude from N.Iraq in road tankers

Fri Jul 13, 2012 10:31am BST

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* Volumes could rise to 100-200 road tankers per day

* Kurdistan locked in energy dispute with Baghdad government

* Turkey eyes energy projects with both Kurdistan, Baghdad (Adds quote, background)

BOLU, Turkey, July 13 (Reuters) - Turkey has begun importing 5 to 10 road tankers of crude from northern Iraq daily and the volume could rise to 100-200 tankers per day, Turkish Energy Minister Taner Yildiz said on Friday.

Iraq's autonomous Kurdistan region, which borders Turkey, is locked in a dispute with the central Iraqi government over oil exports and energy policy has become a sensitive topic.

A Kurdistan regional government source said earlier this week that it had sent a small amount of oil to Turkey by trucks in exchange for diesel, adding it needed the refined product to run power stations.

"Crude purchases from northern Iraq have begun with a volume of 5-10 road tankers. This may rise to 100-200 tankers a day," Yildiz told reporters at a ground-breaking ceremony for a power plant in western Turkey.

Ankara has increasingly courted Iraqi Kurds as its relations with the Shi'ite-led central government in Baghdad have soured. Turkey is a major investment and trading partner for Iraq, especially for Kurdistan.

The Kurdish government source said this week Kurdistan was not getting enough of the refined product under supplies controlled by the central Iraqi government, making the trade with Turkey necessary to fill the gap.

Kurdish Prime Minister Nechirvan Barzani has said that if the central Iraqi government did not provide Kurdistan with its share of refined products, the region would be forced to act.

According to the Kurdistan government, Iraq has cut supplies of products to Kurdistan to 16,826 barrels per day (bpd) from 32,116 bpd from April 25, far below its 140,000 bpd allocation.

Kurdistan infuriated Baghdad last year by signing production sharing contracts with U.S. group Exxon Mobil. A provincial governor said earlier this month he would also like to enter talks with Exxon, the world's largest publicly traded energy company.

Separately, Turkey and Kurdistan are also in talks for the direct sale of natural gas to Turkey.

But in a sign of moves to soothe ties between Ankara and Baghdad, the two governments have started technical work on shipping crude oil from Basra in southern Iraq via the Kirkuk-Ceyhan pipeline to Turkey's Mediterranean coast. (Reporting by Evrim Ergin; writing by Daren Butler; editing by Keiron Henderson)

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