August 29, 2013 / 8:41 AM / 4 years ago

FACTBOX-Middle East energy export risks

Aug 29 (Reuters) - The prospect of a U.S. military strike on
Syria has stoked fears that Damascus, or its closest ally Iran,
may retaliate against U.S. allies in the Gulf - all leading
global oil or gas suppliers. 
    The Middle East produced 28.27 million barrels a day (bpd),
or 32.5 percent of the 86.15 million bpd of oil produced
globally in 2012, according to the BP Statistical Review.
    Below are facts about threats to the major energy transit
routes of the Middle East and possible alternative routes.
    The most important oil transit channel in the world with
some 17 million bpd, or about 35 percent of all sea-borne oil,
passing through in 2011, according to the U.S. Energy
Information Administration (EIA).
    Most of the crude exported from Saudi Arabia, Iran, the UAE,
Kuwait and Iraq - together with nearly all the liquefied natural
gas (LNG) from lead supplier Qatar - sails through the narrow
channel between Oman and Iran.
    Tensions over the Strait have risen since late 2011 as
western government efforts to starve Iran of oil revenues have
sparked threats from Tehran that it might block the channel. 
    The U.S. Navy, which leads a large Western naval force in
the region, has said it would not allow any disruption to
traffic in and out of the Gulf. However, were it to become
impassable other routes would be needed.
    The world's largest oil exporter ships nearly all its crude
oil through Hormuz, mostly to Asia and the United States.
    It has also built a 5-million bpd twin pipeline, called
Petroline, to transport crude from fields mainly clustered in
the east of the country to the Red Sea port of Yanbu.
    But because the kingdom now exports oil mainly to Asia, one
of those pipelines has been converted to carry natural gas to
booming industrial centres in western Saudi Arabia.
    Crude supplies destined for Saudi refineries make up about 2
million of the available Petroline capacity leaving little for
exports out of Red Sea ports.
    After a number of threats by Iran to block Hormuz in early
2012, Saudi Arabia has reopened Iraq's 1.65 million bpd IPSA
pipeline that runs parallel to the Petroline as a back up.
    A parallel 290,000 bpd Abqaiq-Yanbu natural gas liquids
(NGL) pipeline links gas processing plants in the east with NGL
export facilities at Yanbu. But it too provides only a partial
alternative to Saudi shipments of NGL from the Gulf.
    Saudi Arabia used to pump oil through the Trans Arabian
Pipeline across Jordan, Syria and Lebanon to the Mediterranean 
but since the different legs of the 0.5 million bpd "Tapline"
were shut from 1976 to 1990, it has exported most of its crude
on tankers through the Strait of Hormuz.
    There has been talk of reopening the long Saudi leg of the
Tapline to Jordan but it is unclear how quickly a pipeline
closed for two decades could be reopened, and there seems little
prospect that the leg across Syria could reopen soon.
    Saudi energy infrastructure was targeted by terror groups in
2006 but heavy protection has so far prevented major problems.
    It has Patriot missile defense batteries positioned across
the Kingdom to protect towns and oil installations from missile
attacks. But the failure of U.S.-made system to track an Iraqi
Scud missile in the Gulf War, resulting in the deaths of 28 U.S.
soldiers in 1991, shows missiles can still slip through.
    The kingdom is thought to keep some redundancy in its export
system as insurance against the disabling of some facilities,
according to the EIA. Saudi Aramco refuses to comment on what
those options are.
    Iran and Kuwait still rely entirely on the Strait of Hormuz
for exporting oil, while leading LNG exporter Qatar also exports
most of its gas by tanker out of the Gulf.
    The UAE opened a 1.5 million bpd pipeline able to carry the
bulk of its exports to Fujairah on the Gulf of Oman coast in
    Qatar, a small crude exporter, shipped more than 102 billion
cubic metres (bcm) of gas out of Hormuz in 2012, according to BP
Statistics, and it has no alternative route for its LNG.
    Nearly 80 percent of Iraq's crude is exported through Gulf
ports, with the rest sent by pipeline across Kurdistan to the
port of Ceyhan, Turkey. Ceyhan's location close to the Syrian
border could leave it exposed to attack if the conflict widens. 
    Iraq's northern route has a maximum nameplate capacity of
about 1.6 million bpd but less than a third of that flows
through the link which is frequently attacked by insurgents.
    There are plans to increase capacity on the northern route
to help cope with an expected rise in production and reduce
reliance on the Gulf.
    The 0.7 million bpd Iraq-Syria-Lebanon Pipeline has been
unusable since the 2003 war in Iraq but could be fixed if the
region was more stable than at present.
    Iran's total reliance on Hormuz being open is a big
deterrent to Tehran trying to block it and the new government
has adopted a more conciliatory stance in its standoff with the
west over its disputed nuclear programme.
    Iran has stopped threatening to interrupt Hormuz shipping
since 2012. But Assad's staunchest ally, which has warned
Washington against crossing the "red line" on Syria, may revive
its Hormuz threats in response to a U.S. attack on Damascus.
    As oil demand growth has shifted to Asia, only around
800,000 bpd of crude oil and 1.4 million bpd of oil products
sailed through the Suez Canal in 2011.
    But the canal is vital for Qatari LNG exports to Europe and
Qatar has become such a key supplier that a disruption to
shipping through the canal could cause price spikes in European
gas markets and even lead to winter fuel shortages.
    The 2.3 million bpd Sumed oil pipeline connecting the Red
Sea to the Mediterranean could accommodate more oil in the event
of a Suez blockage because it carried only around 1.7 million
bpd in 2011, due to weak European demand.
    See also: FACTBOX-Why small producer Syria matters to oil
Sources: U.S. EIA, Saudi Aramco World, BP Statistical Review,
Reuters News, Sumed website.

 (Compiled by Daniel Fineren,; editing by William Hardy)

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