The quality of Iraq's Basrah crude has stabilized at an API gravity level of 28-30 degrees after some fluctuation in recent months, the country's oil minister said Thursday.
"Its quality is stable around 28-30 API. The only change we had in the past few months there was a difference between the API quality from shipments loaded from the SPMs [single-point moorings] and the old port. But now the issue has been fixed and the Basrah stream is now blended and has the same quality."
New Iraqi oil coming on stream over the past two years has led to variations in crude quality, in particular from the south. This newly produced oil includes some of the traditional Basrah crude from the Rumaila field, but is mostly made up of medium-grade oil from West Qurna 1 and the new fields of Ahdab and Halfaya.
Platts reported late last year that since the commissioning and operation of the new SPMs in March and April last year, Iraq had been effectively exporting two grades of crude from the south: an average API of 32.5 for the oil exported from the SPMs, close to the traditional Basrah Regular API of 34, and 29 for the oil exported from the fixed Basra and Khor al-Amaya terminals. This left a difference of 3.5 API degrees in the quality of the two exported crudes.
Experts suggested at the time that this situation would continue for some time, possibly until new oil storage and pumping facilities at Fao at the northern tip of the Gulf are completed, providing the necessary flexibility for the oil to be received from the various producing fields, stored and then either blended or kept separated before being pumped to the offshore terminals and SPMs.
Luaibi, who was speaking to reporters in Vienna ahead of Friday's OPEC meeting, said the first phase of the Fao storage project had been completed and that exports would begin from Fao in September.
"The first phase of Fao storage capacity is ready for use. We had minor problems with a few technical parts but we expect that it will be installed in two months and exports will start from Fao in September," he said, rejecting any suggestion that there might have problems with the delivery of crude to the storage farm, which would support Iraq's southern export effort.
"There is no problem with that... all infrastructure has been planned and it will be installed properly to deliver the crude to the storage farm," he said. "The second phase of about 24 storage tanks could be finished two years from now," he added.
