Dubai (Platts)--18Jun2007

Iraq will supply Jordan with 40,000 b/d oil at the preferential price of
$18/barrel less than market price, the Jordan-based Al-Dustour newspaper
reported Monday.
     While no date was given for the start-up of deliveries, the report cited
Iraqi finance minister Baqir Jabr al-Zubaydi as saying the arrangement will
depend on improving security and taking various necessary steps.
     Zubaydi added the Iraqi government is also planning construction of a
500,000 b/d pipeline to deliver oil from Iraq to Aqaba, on Jordan's Red Sea
coast, and has already held talks with Jordan to this effect. The plan also
calls for the construction of a refinery at the port, he said.
     In April, Jordan's al-Arab al-Yawn newspaper reported that Iraq is likely
to begin shipping oil to Jordan on a trial basis in early July under the
protection of the al-Anbar "Awakening" forces responsible for protecting
trucks and travelers on the Jordan-Baghdad highway.
     Iraqi oil supply to Jordan was disrupted with the 2003 attack on Iraq,
prompting Jordan to rely temporarily on oil grants from Saudi Arabia, Kuwait
and the UAE. These grants finished last year.
     Prior to the war in Iraq, Jordan had been receiving around 80,000 b/d of
crude from Iraq at a combination of market prices and undisclosed
concessionary terms.