Iraqi Kurdistan is to complete a new oil pipeline to Turkey by the end of the quarter, according to the Kurdistan Regional Government’s energy minister.

The move is set to provoke further ire from Baghdad as the autonomous region increases its control over oil resources in the northern region.

Ashti Hawrami said that the pipeline, with an initial capacity of 300,000 barrels per day, would be completed by the end of September, Reuters reported.

Exports are to enter the Kirkuk-Ceyhan pipeline at the Fishkhabur pumping station near the Turkish border, flowing directly to Turkey’s southern port of Ceyhan for shipping to international markets.

The plan is being backed by Turkey, and Genel Energy is thought to be planning to send its Taq Taq output through the pipeline.

Kurdistan has stopped exporting through the central government-controlled pipeline, trucking only small amounts via tanker to Turkey and leaving most of its oil output stranded.

Kurdistan’s oil production capacity is now at 300,000 bpd and is rising rapidly to 400,000 bpd by the end of this year, most of it destined for export, Hawrami added.

With the further construction of new pumping stations, the pipeline would be able to export more than 1 million bpd by the end of 2015 and 2 million bpd by 2019, Hawrami said.

Sales of Kurdish oil via the central government through Iraq’s federal pipeline system also could resume but that will depend on a permanent resolution of the political and constitutional issues, Hawrami said.

No agreement has been reached so far between Iraq and Kurdistan on payments to oil companies working in the region, despite a meeting earlier in June between leaders on both sides.

The prime ministers of Iraq and the KRG met last week in Erbil, and agreed to set up committees to focus on Iraq’s oil and gas law and revenue-sharing legislation, but made little progress on substantive issues.

“There was no discussion about oil payments … Our dispute is constitutional, we are looking at the big picture,” Hawrami said.

The KRG will also seek to export natural gas to Turkey and elsewhere in Europe once domestic needs are met, Hawrami said.

“By 2016, I believe, we will have first exports of gas for the Turkish grid,” he said.

Source: Upstream Online