France's TotalEnergies seeks stake in consortium to build Syrian-Iraqi pipeline

French energy company TotalEnergies is aiming to secure a 10% stake in a new alliance set to construct a pipeline for exporting Iraqi oil to the Mediterranean, according to CEO Patrick Pouyanne. The CEO disclosed this during an event at the French presidential palace in Paris, where France and Iraq recently inked several agreements.

Pouyanne revealed that TotalEnergies is actively negotiating to join the consortium, which also encompasses US oil and gas major Chevron, Qatari-Syrian firm UCC Holding, and US investment company TI Capital. The consortium is planning to build the Basra-Baniyas pipeline, a project aimed at offering Iraq an alternative pathway for oil exports, particularly after the closure of the Strait of Hormuz due to a joint US-Israeli attack.

The Iraqi government has been advocating for such alternative export routes to alleviate its oil export challenges following the Hormuz Strait blockade. The pipeline would enable Iraq to transport crude oil from its southern Basra oilfields, situated near the Arabian Gulf, to Baniyas on Syria's Mediterranean coast, ultimately reaching Europe and beyond.

TotalEnergies announced its intent to join the consortium in August, with discussions on finalizing the project's structure yet to conclude. Industry experts estimate the total cost of the pipeline at $15 billion, with construction expected to span at least four years.

Recent drone attacks on a Saudi pipeline by Iraq have underscored the precarious state of regional infrastructure. Iraq has been contemplating various pipeline projects, including the rehabilitation of an old route built in the 1950s between Baniyas and Kirkuk in northern Iraq, which had a capacity of approximately 300,000 barrels per day when it was operational.

During Ali Zaidi's visit to Paris, Pouyanne signed a preliminary agreement with Iraq's Ministry of Electricity, Ali Wahib, for TotalEnergies to bolster Iraq's liquefied natural gas supply. Other accords were signed between Baghdad and Paris, encompassing defense, data infrastructure, and civil aviation.

Pouyanne has consistently emphasized the necessity for TotalEnergies to diversify its routes in the Middle East, especially given the company's significant presence in Abu Dhabi and Iraq. He reiterated this stance in Stavanger, Norway, in July and August, stressing the importance of building pipelines to circumvent the Hormuz Strait.