Iraq is expected to deliver in March the first oil shipment to Egypt as part of a one-year agreement reached by the two countries in late 2016, Iraqi Ambassador to Cairo Habib Al-Sadr said on Monday.
In an interview with Al-Ahram daily newspaper, Al-Sadr said the first batch, set at one million barrels per month, would be delivered at the end of March 2017, adding that the deal should bridge the gap between oil production and consumption in Egypt.
The ambassador, who took office two months ago, said he had been working "behind closed doors" to speed up the shipment's delivery, given its importance for both countries.
Al-Sadr said Iraq's Oil Marketing Company SOMO had inked the supply contract, and that Iraqi and Egyptian officials finalised the technical aspects of the contract after receiving the green light from their respective political leadership.
He added that there is a plan for a strategic project between Egypt, Jordan, and Iraq to extend oil and gas pipelines from Iraq's Al-Basra Oil Terminal to Jordan, through the Port of Aqaba port and on to Egypt.
The project would require constructing storage tanks to store Iraqi petroleum, Al-Sadr said, adding that the project aims to fulfil Egypt's and Jordan's needs for petroleum products. Any residual in excess of the two country's needs would then be exported to international markets.
Al-Sadr said it could take two to three years to get the project up and running.
"Iraq hopes Egypt will become a new and one of the most prominent targets to export Iraqi petroleum in the medium term. We are also interested in diversifying outlets for oil exports," Al-Sadr added, saying the pipeline would provide an new route to ship petroleum to European and international markets.
The envoy said a third project is in the works where Iraq would supply Cairo with crude oil for refinement before it is delivered back to Iraq as oil products.
According to the ambassador, a memorandum of understanding has been signed over the deal.
Tarek El-Hadidi, the head of Egypt's state oil company EGPC, had recently confirmed that a deal was signed with the Iraqi government to import Iraqi oil under a one-year agreement, which could be renewed.
Egypt has been aiming to procure oil for its domestic market needs from several sources since November 2016, when the Saudi national oil company Aramco halted shipments of oil products to Cairo that were part of a multi-billion dollar aid deal.
In November, Kuwait approved an extension of its oil exports to Egypt starting January 2017, with a grace period of nine months.
According to Kuwaiti newspaper Alrai, Kuwait would supply Egypt with two million barrels of crude oil a month at the global price.