Syria – part two
Refining/Downstream: Syria's two refineries are located at Banias and Homs. Total current production from these refineries is 242,140 bbl/d (135,000 bbl/d and 107,140 bbl/d, respectively).
Syria is planning to construct a third refinery, with an initial capacity of 60,000 bbl/d (possibly increasing to 120,000 bbl/d), at Deir ez-Zour to supply products to the eastern part of the country. A feasibility study on this project reportedly was completed in January 1998.
In addition, Syria plans to upgrade its two current refineries, both of which are in urgent need of overhauling, to replace output of fuel oil with light products.
Syria markets all of its crude oil, including that produced by foreign companies, solely through state marketing company Sytrol.
Prices for Syrian Light and Suwaidiyah blends are tied to the price of dated Brent and are adjusted monthly.
At present, Sytrol has term contracts with more than 20 companies. Since January 1994, Sytrol has had a clause in its term contracts prohibiting customers from re-selling Syrian crudes without written permission from Sytrol. This is intended to curb spot trading in Syrian crudes and especially sales to Israel.
Syria's major oil export terminals are at Banias and Tartous on the Mediterranean, with a small tanker terminal at Latakia. Banias can accommodate tankers up to 210,000 dead weight tons (dwt), and has a storage capacity of 437,000 tons of oil in 19 tanks.
Tartous can take tankers up to 100,000 dwt, and is connected via a pipeline to the Banias terminal. Latakia can handle oil tankers up to 50,000 dwt. All three terminals are operated by the Syrian Company for Oil Transport (SCOT), a sister of SPC.
SCOT also is in charge of Syria's pipelines, including: 1) a 250,000-bbl/d export line from SPC's northeastern fields to the Tartous terminal, with a connection to the Homs refinery; 2) a 500,000-tons/year refined products pipeline system linking Homs refinery to Damascus, Aleppo, and Latakia; 3) a 100,000-bbl/d spur line from al-Thayyem and other fields to the T-2 pumping station on the old Iraqi Petroleum Company (IPC) pipeline; 4) a spur line from the al-Ashara and al-Ward fields to the T-2 pumping station.
On July 14, 1998, Syria and Iraq signed a memorandum of understanding on reopening the IPC pipeline, which links the Kirkuk oil fields in northern Iraq with Syria's port of Banias on the Mediterranean.
The 552-mile, 1.1-1.4 million-bbl/d (nameplate capacity) pipeline was closed in 1982 after a break in diplomatic ties, then severely damaged during the 1991 Gulf War.
As a replacement for the aging IPC, Syria and Iraq reportedly have discussed building a new pipeline from Kirkuk to Banias, and also for a joint 140,000-bbl/d refinery at Banias to handle the Iraqi (and possibly Syrian) crude being pumped through the pipeline.
In early March 2000, both the Iraqi and Syrian sections of the IPC pipeline were reported as ready for operation, with Syria using parts of it to transport its own crude oil (Iraqi oil exports through the pipeline would require U.N.
Security Council approval) to Mediterranean terminals.
In the meantime, press reports indicated that Iraqi oil was being smuggled into Syria by truck.
In November 2000, numerous press reports indicated that Syria and Iraq had reopened the Kirkuk-Banias pipeline, with the Middle East Economic Digest (MEED) reporting initial deliveries of Iraqi crude oil through the line (and also possibly by rail) at around 140,000-150,000 bbl/d.
The oil, most likely Basra Light, could be used in Syrian domestic refineries, thus freeing up more Syrian oil for export to world markets, earning Syria extra hard currency oil export revenues (and also earning Saddam Hussein significant revenues outside the UN "food-for-oil" program).
Since Iraq remains under UN sanctions, with oil exports allowed only under the "food-for-oil" arrangement via approved export routes, if the Kirkuk-Banias line really is being utilized, it would represent a potentially serious breach of UN sanctions against Iraq.
According to the International Energy Agency's Monthly Oil Market Report, indications are that Iraqi oil flows through Syria ceased in January 2001, but apparently increased in early February back to 150,000 bbl/d.
On January 23, 2001, the Bush administration offered to allow Iraqi oil exports through Syria as long as they were regulated by the UN food-for-oil program.
As of early February 2001, the Syrian government was consistently denying any smuggling of Iraqi oil through Syrian territory.
Natural gas: Syria's proven natural gas reserves are estimated at 8.5 trillion cubic feet (Tcf). Most (around three-quarters) of these reserves are owned by SPC, including about 3.6 Tcf in the Palmyra area, 1.6 Tcf at the al-Furat fields, 1.2 Tcf at Suwaidiyah, 0.8 Tcf at Jibsah, 0.7 Tcf at Deir ez-Zour, and the remainder at al-Hol, al-Ghona, and Marqada.
About half of Syria's gas is non-associated, with the rest either associated (with oil) or "cap" gas. In June 1999, a new gas field, called North al-Faydh, reportedly was discovered by SPC.
The field reportedly has production potential of 35 million cubic feet per day (mmcf/d). In 1999, Syria produced about 213 billion cubic feet of natural gas, an approximately five-fold increase over the past decade.
Syria plans to increase this production even further in coming years (possibly doubling by 2005, according to Oil Minister Jamal), as part of a strategy to substitute natural gas for oil in power generation in order to free up as much oil as possible for export.
A number of new gas-fired power projects are currently under construction or being planned. Another possible source of natural gas is imports.
In January 2001, Syria signed an agreement with Egypt and Lebanon on a $1-billion, 250-mile, underwater gas pipeline from El Arish on the Sinai Peninsula's Mediterranean coast to the Lebanese port city of Tripoli (then onward to Turkey and possibly Jordan as well).
Construction could begin in several months and take up to four years to complete. The gas likely would be used to fuel power stations in Lebanon, Syria, and Turkey.
A key challenge for the Syrian natural gas industry is logistical, with gas reserves located mainly in northeastern Syria, while population is centered in western and southern Syria. SPC currently is working to increase Syria's gas production through several projects.
The Palmyra area in central Syria is the site of much of this activity, including development of the Al Arak gas field, which came onstream at the end of 1995.
Other gas fields in the Palmyra area include Al Hail and Al Dubayat, both of which are "sweet gas" and two "sour gas" fields -- Najib and Sokhne.
Syria is attempting to expand output at Najib through its central area gas project. Foreign energy companies have been invited to submit proposals on gas projects in the Palmyra region. Reportedly, such companies as Conoco, Shell, and TotalFinaElf are interested.
In October 1997, Syria announced discovery of a large new gas field in the Abi Rabah area of the Palmyra region. In addition to supplying a new (completed in 1997), 375-megawatt, power plant at Zaisoun in central Syria, the Palmyra fields also are to be linked with a new pipeline to Aleppo, as well as to the Tishreen power plant in Damascus and the Mhardeh power plant in Homs.
Najib, the fourth and final field to be developed in the Palmyra region, was due to start production in late 1999 at a capacity of 100 mmcf/d.
In August, 1998, the Arab Petroleum Investments Corporation announced that it would lend $50 million to the development of a new gas field in the north Palmya area, as well as partial financing of a new gas plant at Najib and Zara. The loan will be allocated to finance gas projects being executed by SPC.
Syria's Jibsah gas treatment plant, which came online in 1988, accounts for more than one-quarter of the country's total gas processing capacity.
Jibsah's capacity was increased 88 percent in a project completed during the first half of 1997, and now is being increased again (to 105 mmcf/d from 60 mmcf/d currently).
Other Syrian gas processing plants include: the Deir ez-Zour Gas Treatment Plant (since 1991); the Jafra Gas Separation Plant (late 1996); and the Palmyra Gas Processing Plant (late 1996).
In November 1998, SPC signed a $430-million service agreement with Conoco and TotalFinaElf to utilize associated gas, now flared, in the Deir ez-Zour oil fields. TotalFinaElf and Conoco each hold 50 percent interest in the project, with Conoco as lead operator.
In March 2000, the two companies awarded Kvaerner ENC a $160-million contract to engineer, procure, and construct infrastructure for the project.
The Deir ez-Zour gas development work will include the construction of a gas gathering system and processing plant, and a 155-mile pipeline that will carry 150 mmcf/d of residual gas to the national grid near Palmyra that serves western Syria.
Gas also will be reinjected into TotalFinaElf's Tabiyeh field to enhance condensate recovery. Construction is expected to be completed by September 2001, with Stage 1 possibly finished in July 2001.
TotalFinaElf announced that it is also considering joining a project to build a $175-million, 105-mmcf/d pipeline that would supply power stations in Lebanon with natural gas from Syria.
As increased volumes of natural gas feedstock become available, and given abundant phosphate reserves, Syria is adding capacity to produce fertilizer.
At present, Syria has two nitrogenous fertilizer plants and one phosphate-based unit, both located at Homs. Syria also has plans for significant further expansion in fertilizer production, including a 450,000-ton-per-year nitrogenous complex near the northeastern town of Haseko. This plant would utilize gas from the Omar field.
In addition, a 500,000-ton-per-year triple-super-phosphate plant is being constructed near Palmyra by Bechtel and Makad International.
Electric power: As of 1999, total installed Syrian electric generating capacity was 4.5 gigawatts (GW). With Syrian electric power demand growing at about the same pace as the economy, adding electricity supply capacity is an important national priority.
In September 1993, with Syria suffering a severe electricity shortage, President Hafiz al-Asad declared that a secure supply of electricity was the right of every Syrian.
Since then, existing power stations have undergone maintenance and four new generating plants have been built (including the 600-MW al-Zara gas/oil plant near Hama, completed by Mitsubishi in November 2000).
Also planned are the 300-MW Zeizoun plant and the 630-MW Tishreen hydro station. Overall, Syria hopes to add 3,000 MW of power generating capacity between 2004 and 2010.
While power generation capacity in Syria now appears adequate, the country's power distribution network remains a problem.
Transmission losses are estimated as high as 25 percent of total generated capacity due to a variety of factors including poor quality wires and transformer stations.
In December 2000, the European Investment Bank (EIB) agreed to lend Syria 75 million Euro for expansion and upgrading of the country's power transmission network (in February 2001, the EIB agreed to lend another 115 million Euro).
The project, scheduled for completion by 2005, will involve construction, upgrading, and expansion of sub-stations, overhead power lines, and underground cables. In addition to the EIB, funds for this project is coming from Arab Gulf states and the Syrian government.
As of February 2001, a project to link the electric power grids of Syria, Turkey, Egypt, Jordan, and Iraq continued to move forward, with successful completion of trial power links between Syria, Egypt, and Jordan.
A 217-mile connection to Turkey is tentatively scheduled for completion by the end of 2001. In September 1999, Jordan and Syria agreed to formally connect their power grids via 400-kilovolt cable.
In March 1999, Jordan linked its power grid with Egypt's through an underwater cable in the Red Sea. In August, 1998 Turkey reported that its 115-mile transmission line from the Ataturk Dam to the border region with Syria was completed, but that the electricity could not be provided due to Syria's delayed construction on the connecting grid.
In June 1999, Syria and Iran signed a protocol on electric power cooperation between the two countries. As part of its strategy to save oil for hard currency exports, Syria has plans to build several natural gas, combined-cycle power plants, and to convert the country's major oil-fired plants to natural gas.
Two of Syria's largest power stations -- the Mahrada and Banias plants -- have been converted from fuel oil to natural gas in recent years. Gas for these two plants comes from the Palmyra fields.
Syria also plans to increase gas usage at the dual-capacity (fuel oil or natural gas) Tishreen power plant. Gas for Tishreen is to come from the Omar treatment plant. In addition to these plants, Suwaidiyah Station II had five new gas turbines installed in 1989, while Suwaidiyah I operates mainly on associated gas from nearby fields.
On May 19, 1999, the director-general of Syria's Atomic Energy Commisssion signed an agreement with Russia on cooperation in peaceful uses of nuclear power, including construction of two nuclear reactors in Syria.
On February 23, 1998, Syria and Russia had signed an agreement on the peaceful use of nuclear energy, and in July, 1998 the two countries had agreed on a timetable for a 25-MW light-water nuclear research center project in Syria with the participation of Russia's Atomstroyeksport and Nikiet.
Minister of Oil and Mineral Resources: Muhammed Maher bin-Husni Jamal.
Minister of Electricity: Munib bin-Asad Saim Al-Dahar
Proven Oil Reserves (1/1/01E): 2.5 billion barrels
Oil Production (2000E): 530,000 barrels per day (bbl/d), of which 522,000 bbl/d was crude oil
Oil Consumption (2000E): 255,000 bbl/d
Net Oil Exports (2000E): 276,000 bbl/d
Crude Oil Refining Capacity (1/1/01E): 242,140 bbl/d
Major Crude Oil Customer: European Community
Major Ports: Latakia, Banias, Tartus
Natural Gas Reserves (1/1/01E): 8.5 trillion cubic feet (Tcf)
Natural Gas Production/Consumption (1999E): 213 billion cubic feet (Bcf)
Electric Generation Capacity (1999E): 4.5 million kilowatts (80 percent thermal, 20 percent hydroelectric)
Electric Generation (1999E): 17.9 billion kilowatthours (58 percent hydroelectric, 42 percent hydroelectric)
Oil & gas industries:
Organization: The state-owned SPC (SPC) controls all oil resources, and directly produces about one-fourth of Syrian output. Al-Furat Petroleum Company (AFPC), of which 50 percent is owned by the SPC, and the other 50 percent by three foreign companies (Shell, its U.S. affiliate Pecten, and Germany's Deminex), is responsible for about 65 percent of Syrian output. Sytrol is the state oil marketing company.
Major Foreign Energy Company Involvement: Conoco, Deminex, Royal Dutch/Shell, TotalFinaElf, Veba
Major Oil Fields: Deir ez-Zour and Jafra in eastern Syria; Karatchuk in the far northeast .
Major Refineries: Syria's two refineries are located at Homs and Banias, with crude refining capacities of 107,140 bbl/d and 135,000 bbl/d, respectively. A third refinery is planned for Deir ez-Zour with initial capacity of 60,000 bbl/d, rising to 120,000 bbl/d.
Major Oil Export Terminals: Banias, Tartous, Latakia
Source: United States Energy Information Administration
© 2001 Mena Report (www.menareport.com)