JEDDAH, 14 June — The seizure of an Iraqi oil pipeline on Saudi territory last week was meant as a political message to Baghdad and the Kingdom still has no plans on what to do with it, oil officials said yesterday.
Arab News reported yesterday quoting a high-level source at the Ministry of Petroleum and Mineral Resources that the $2.25 billion pipeline, confiscated by Riyadh last week, might be used to transport gas after technical modifications.
But officials said the pipeline would not be used to carry gas and the Kingdom had no specific plans yet. “It is purely a political decision. We still have no intentions on whether it would be used for oil or gas at the moment,” Reuters news agency quoted one official as saying.
The pipeline was only used for one year after its construction and was shut down following Iraq’s 1990 invasion of Kuwait.
The sources said the move was in retaliation to what they said were Iraqi attacks on Saudi border outposts in recent months. “Now that we own (the pipeline), we can do whatever we want with it to benefit the Saudi economy ... this is a final and irreversible decision,” one source said.
“Saudi Arabia is now in control of the pipeline, the pumping stations, storage units, communications equipment and other facilities,” he said.
One source has said that a part of the Iraq-Saudi pipeline is ready to ship gas, but others have said Saudi Arabia does not have the gas to ship at present. “We don’t have the gas to ship right now,” a Saudi source said. “The important point is if we need to use it, it is ours. It is not an Iraqi pipeline by any means.”
“Whether it be gas or oil, the pipeline will be put to its best use commercially ... it is a pipeline looking for a job,” he added.
Industry sources said that putting the line to use had been talked about for years. “At the very least it will help pay for maintenance,” one said, estimating the annual cost at up to $20 million.
Saudi Arabia, the world’s biggest oil producer, is trying to utilize its vast gas resources to power its industry and free more crude for exports.
The Iraq-Saudi pipeline had the capacity to bring 1.6 million barrels per day of crude to the Red Sea. It had been in full operation from September 1989 until August 13, 1990, alternately carrying Saudi and Iraqi oil to the Red Sea for export.
