Iraq's gasoline, LPG output falls; exports from Turkey resume

Iraq's gasoline, LPG output falls; exports from Turkey resume

Baghdad (Platts)--12Jun2006

Turkey resumed exports of gasoline and other refined products to Iraq in
May for the first time since they were suspended on January 21 in a dispute
over payment to Turkish traders, Iraqi Ministry of Oil figures obtained by
Platts show.

Sources close to Iraq's State Oil Marketing Organization (SOMO) and
Turkish traders told Platts that imports were resumed after resolving a
dispute over letters of credit issued by Iraqi financial authorities and an
agreement on a repayment schedule for debts accumulated during 2005.

They said Turkish traders delivered all quantities contracted for May
with the Iraqis asking for the same quantity to be delivered in June. A SOMO
delegation is scheduled to visit Turkey soon to negotiate new contracts
for longer periods, possibly until the end of 2006, they said.

The imports from Turkey in May come as a welcome relief for the new Iraqi
government as the country faces a severe shortage of refined products,
reflected in long queues at gasoline stations and high black market prices,
particularly for LPG cylinders, gasoline and gasoil.

May figures showed that Iraq imported 1,945 mt/d of LPG compared to
1,200 mt/d in April; 8.57 million liters/d of gasoline compared to 5.7 million
the previous month; and 3.64 million liters/d of gasoil, up from 2.42 million.

The sources of imports during May were 20% from Turkey, 7% each from
Syria and Iran, 25% from Kuwait and 41% from the Persian Gulf via the sea
route.

Domestic refineries continued to operate at around 60% of their rated
capacities during May, generally lower than the rates achieved in April.

The production rates of the principal products during May compared to
April were: 1,455 mt/d of LPG compared to 1,635 mt/d in April; gasoline
9.25 million liters/d, down from 11.2 million in April; 4.4 million liters/d
of kerosene compared to 4.7 million in April; and gasoil 11.8 million
liters/d, up from 11.4 million.

Daily consumption rates in May were higher for gasoline and gasoil than
the rates in April, with the rise attributed to the increase in demand to
operate industrial and domestic electrical generators because of lengthy power
cuts.

May consumption rates were as follows: LPG 3,090 mt/d; gasoline 19.6
million liters/d; kerosene 2 million liters/d; and gasoil 13.5 million
liters/d.

Daily production of fuel oil during May was 30.6 million liters/d, of
which 8.5 million liters/d were exported. Of the total, 7.8 million liters/d
were exported to the Gulf by sea, 600,000 liters/d to Turkey, and a trickle to
Syria.

--Faleh al-Khayat, newsdesk@platts.com

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