Overview of Mideast hydrocarbon pipelines 2018

The Middle East is known for the abundance of hydrocarbon resources and thus oil and gas pipelines have become an integrative part of the landscape. However, from the very beginning, the pipeline business in the Mideast has been a gamble. The outcome from 2018 analysis is that eight inter-state Mideast hydrocarbon pipelines, which had already terminated operation, had been in use for a median lifetime period of 11 years. Furthermore, looking at the fifteen currently operating inter-state hydrocarbon pipelines in the Mideast, it appears that their median operation lifetime to date is 12 years - both figures implying regional stability. Despite stabilization during the past three years, considering the persistent turmoil in the Mideast, there seems to be little certainty yet for long-term pipeline operational stability in the region.

The Middle East is known for the abundance of hydrocarbon resources and thus oil and gas pipelines have become an integrative part of the landscape. Almost every country in the Middle East has constructed some kind of pipeline infrastructure for internal purposes or connecting it with a neighbour, with multiple more such projects being planned at various levels, beginning with various hypothetical pipelines in the Gulf, continuing with export pipelines from Cypriot Aphrodite and Israeli Leviathan and ending with grandiose trans-continental projects, such as Nabucco. However, from the very beginning, the pipeline business in the Mideast has been a gamble. For example, the Mosul-Haifa oil pipeline, constructed by the British in 1935 in order to transport oil from British-protected Kingdom of Iraq to British Mandate Palestine-EY via British protectorate of Transjordan, had operated for just 13 years. Though in the beginning the whole pipeline seemed to operate in the seemingly stable British domain, the post-World War II developments made all those three countries independent and increasingly unstable. As another example, the Trans-Arabian oil pipeline, running from Saudi Arabia to Lebanon via Transjordan and Syria, had operated for 17 years, failing to continue due to financial disputes. The Kirkuk-Banias oil pipeline had successfully surpassed five decades of continuous operation, though eventually terminating due to the 2003 Gulf War. Perhaps only the A-B oil pipeline from Saudi Arabia to Bahrain is an example of long-term stability running almost continuously from 1945.

Considering the persistent turmoil in the Mideast, there seems to be little certainty for long-term pipeline operational stability in the upcoming future. There have been multiple disruptions in Rehab branch of Arab Gas pipeline (AGP) from Egypt to Jordan over the past seven years, with partial operation capacity at present whereas most of the branches of the Arab Gas pipeline have meanwhile become defunct. Furthermore, most pipelines passing via Eastern Turkey have become targeted by insurgents during the ongoing PKK rebellion, sporadically terminating the flow. The Kirkuk-Ceyhan oil pipeline (KCP) Mosul-Kirkuk branch was sabotaged by Jihadists in 2013 and had terminated the flow until Iraqi return in 2017, while the alternative Taqtaq-Peshkhabur branch running through the Kurdish region has already been attacked at least once. Most recently, the A-B oil pipeline was attacked in November 2017, temporarily terminating the flow.

Table 1. The median lifetime of operating and disbanded Mideast pipelines. The median period of operation for disbanded pipelines for 2018 is 11 years (absolute and normalized), while for currently operating pipelines the median operation lifetime is 12 years (absolute and normalized).

During 2017, several Mideast pipeline projects have progressed in planning and construction, most notably the planning of gas pipeline from Iraqi Kurdistan to Turkey, inauguration of the first Israeli-Jordanian gas pipeline and preparations for the construction of the second, progress on Russian-Turkish Turkish Stream gas pipeline, progress on Turkey-Bulgaria Interconnector (TBI), works on TANAP, progress on new A-B oil pipeline and discussions over possible Iraqi Kurdistan-Iran oil pipeline. On the other hand, potential gas pipeline projects from Qatar to Turkey, Israel to Turkey, Israel to Egypt, Israel to Cyprus, Cyprus to Europe and the notorious Nabucco project have shown little progress.

The calculation of pipeline lifetime in this study is combining the operating and partially operating pipeline lifetimes within a single category, but normalized it by lifetime multiplied by available capacity. The above presented 2018 statistical analysis includes correction of AGP-Ashkelon branch operation lifetime, which was wrong in previous report - de-facto operational flow began in 2008, and not in 2005, which was the year when the contract was signed. Also, the Russian-Turkish West Line natural gas pipeline was added to the calculation, while being omitted in previous report.

Figure 2. Mideast Pipelines Index calculated from lifetime of operating and disbanded pipelines. Rise of the Index implies increasing regional instability.

The outcome from 2018 analysis is that eight inter-state Mideast hydrocarbon pipelines, which had already terminated operation, had been in use for a median lifetime period of 11 years. Furthermore, looking at the sixteen currently operating inter-state hydrocarbon pipelines in the Mideast, it appears that their median operation lifetime to date is 12 years. As for the currently operating pipelines - their lifetime could extend longer if no disruptions occur. This outcome is similar to the results of the previous Mideast hydrocarbon pipeline assessment published last year. While one can certainly assert that those statistics are somewhat non-representing, since most pipelines in the region have been inaugurated over the past two decades, there is still an interesting trend arising. In conclusion, numerous geopolitical factors and global financial factors may turn the operating hydrocarbon pipelines into sources of wealth and prosperity on one hand and idle pieces of metal in the Mideast deserts on another. It looks that 11-12 years pipeline lifetime is still a challenge, but Mideast Pipelines Index implies stability for the near future.

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