The UNJLC Iraq Fuel Bulletin aims to provide a clear and concise periodic overview – usually weekly – of the situation as it exists in Iraq with regards to the oil industry. It focuses on the availability of fuels, particularly as they affect the welfare of the populace and related humanitarian work. It further seeks to identify major issues for the humanitarian community and other interested parties, to provide relevant background and constructive recommendations on current issues, and to alert responsible parties to emerging issues in the crisis so that they may be addressed in good time. The UNJLC Iraq Fuel Planning Team presently has dedicated representatives in Baghdad, Basra and Erbil. For further information please contacted info@unjlc.org.

Contact details for all UNJLC offices are available here.

• OVERVIEW
• Infrastructure
• Refining
• Diesel
• Gasoline
• Liquid Petroleum Gas (LPG)

OVERVIEW Oil production in the south is running at less than 10% of surface capacity largely due to a lack of storage facilities. The commencement of crude exports in earnest from the offshore Mina Al-Bakr Oil Terminal in the coming weeks will greatly ease this pressure and allow substantially increased production. Significantly, this will generate more gas and, plant capacity allowing, should assist the supply situation. Oil production in the north is now estimated to be approaching 60% of surface capacity. Significant quantities of gasoline continue to be trucked in from Turkey, Jordan and Kuwait, sometimes in quantities of 4 million litres per day. LPG is being imported from Turkey but is unavailable in Kuwait in the quantities required. Plans are in place to import a shipload of LPG through the Khor al-Zubayr terminal, upstream from Umm Qasr.

Infrastructure

The run down state of the industry’s infrastructure and shortage of spares, combined with the effects of looting, continues to limit production, refining and distribution capacity. OCPA contractors are making steady but slow progress in assessing work needs and rehabilitating the industry to pre-war levels. UNJLC is focusing significant effort on expediting the delivery of much-needed spares, materials, equipment and chemicals acquired by Iraqi under the Oil-For-Food Programme

Refining

Refinery production in general continues to be plagued by the effect of damage to the national grid and the general state of the industry infrastructure. Power interruptions – often caused by looting of transmission lines and other equipment – are adversely affecting overall refinery productivity. Plant availability is running at about 50% for refined products and much less for LPG. Basrah Refinery has maintained the increased level of production achieved after bringing a second train on line in May but this has been partially offset by the effects of a planned maintenance phase at the country’s largest refinery at Baiji, north of Baghdad.

Diesel

Stocks of diesel remain high and it is generally (although not universally) available, even though queues at filling stations may be long. However, smuggling to neighbouring countries by barge and retrofitted fishing boats, and illegal tapping of pipelines, continues to be a problem. This is unlikely to cease until security improves.

Gasoline

Production of gasoline is slightly above half of total daily demand, but with uneven distribution. A black market is flourishing, especially in Baghdad and the central and south areas. The security situation is also affecting distribution. Nevertheless, the combination of expected greater crude production in July (especially from the south) and imports are likely to stabilize the situation in the medium term and to eventually eliminate the black market. Daily demand is thought to be in the region of 15 million litres. Surprisingly, “super” gasoline is now more available in Baghdad than regular gasoline as much of the imports are of “super”. Supplies of a key additive in Iraqi gasoline production, Tetra Ethylene Lead (TEL) have arrived in the region and should be in Iraq later this month. Nevertheless, with existing TEL stocks critically low, further near-term shortfalls in production are expected.

Liquid Petroleum Gas (LPG)

Supply of this primary cooking fuel remains poor. Only about 20% of demand is being met from domestic production. Major plants are all working at a very low capacity. They require a greater level of technical sophistication and investment than refineries of liquid hydrocarbons to return to pre-conflict production levels. Continued LPG imports may be necessary at least throughout the summer although the importation of an entire ship’s cargo through the country’s main LPG plant and export port at Khor al-Zubayr should ease the situation. Much Coalition attention is being devoted to bringing the Khor Zubair plant on line but it is unrealistic to expect substantial Khor Al-Zubayr production until late summer or even autumn.

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ABOUT UNJLC
UNJLC is an inter-agency facility reporting to the Humanitarian Coordinator for Iraq and generally to the Inter Agency Standing Committee. Its mandate is to coordinate and optimise logistics capabilities of humanitarian organisations in large scale emergencies. UNJLC operates under the custodianship of WFP that is responsible for the administrative and financial management of the unit. UNJLC is funded from voluntary contributions that are channeled through WFP. The UNJLC project document for Iraq can be viewed at the UNJLC website (www.unjlc.org).