Iraq-Jordan pipeline increases risk of terrorist attacks in Jordan

The project is Iraq's largest oil pipeline project in decades and aims to export oil from its oil-rich Basra province in the south to the Jordanian port of Aqaba on the Red Sea. The project is part of an Iraqi strategy to lessen its reliance on its two export terminals in the Gulf (Basra and Khor al Amaya), thereby bypassing the Strait of Hormuz. Iraq is also keen to lessen dependence on the Kirkuk-Ceyhan pipeline, which has faced repeated attack by Sunni insurgents and Kurdish insurgents affiliated with the Partiya Karkerên Kurdistan (PKK). At the same time, the project will make Jordan more energy dependent on Iraq (as it was during the Saddam Hussein era), something that may act as a check on the level of Saudi influence over Jordan.

Phase one of the plan – for which no timeline for completion has been given – entails a 2.25 million barrels per day (bpd) pipeline from Basra to Haditha in Anbar province and a 1 million bpd pipeline from Haditha to Aqaba. The pipeline will potentially ship 1 million bpd of crude in its first phase out of total of exports of 2.3 million bpd (more than 70% of Iraq's total oil output). Of these exports, Jordan will receive around 150,000 bpd of oil with the remainder sold to the international market Iraq also plans to build a 350 million cubic feet per day (MMcf/d) gas pipeline in parallel to the oil pipeline of which around 100 MMcf/d will go to Jordan for domestic use. The entire pipeline is due to be completed in 2017.

The economic benefits to Jordan

As Jordan imports more than 95% of its energy needs, the most apparent benefit of this pipeline will be the availability of additional supply to help meet domestic demand. In addition, the natural gas pipeline slated to run parallel to that carrying crude oil will deliver 40% of the 258 MMcf/d consumed domestically, primarily for electricity generation. As a consequence, the influx of Iraqi energy supplies will meet Jordanian domestic needs and help keep down energy prices in the kingdom as well as mitigate some of the price hikes Jordanian consumers have been forced to incur due to subsidy cuts. Electricity prices for businesses were raised 15% in August and with the same percentage increase due to be introduced for households with bills exceeding USD50 per month planned for early 2014. These price rises have provoked persistent, ongoing and sometimes violent protests by up to hundreds of protesters at a time and involving stone-throwing, roadblock and arson attacks on police stations in cities in the poorer south of the country such as Karak, Tafileh, and Maan.

Furthermore, associated transit fees (forecast by to bring about USD3.0 billion annually), as well as the agreement between the two countries stipulating that Jordan can export the balance of crude supply it does not consume means that government revenues will be enhanced. The pipeline itself is slated to cost about USD18 billion, to be funded by the Iraqi oil ministry, and construction will help fuel investment inflows and spending, boost activity in domestic engineering and manufacturing industries and sectors related to the project, thereby promoting job creation. Greater financial inflows also means that the country's foreign exchange reserves position will be strengthened, giving policy-makers more effective financial tools in the event of potential future economic shocks (for example the 2008 global credit crisis) as well as ensuring the sustainability of the Jordanian dinar's currency peg to the US dollar (JOD0.709 = USD1).

New terrorist targets

The terrorist threat to Jordan is low, but the breaking up in October 2012 of an alleged 11-man Al-Qaeda cell planning attacks against shopping malls, diplomatic missions, and hotels using explosives, car bombs, machine guns, and mortars has highlighted the emergence of a new transnational threat to Jordan since the outbreak of the civil war in Syria in 2011. Moreover, Syria-based militant groups Jabhat al-Nusra and the Islamic State of Iraq and the Levant (ISIL) have recruited Jordanians to take part in the insurgency against the Syrian government. Jordanian government officials in September 2013 said that approximately 400 Jordanians were fighting in Syria. Pro-jihadist demonstrations numbering in the hundreds of people have taken place in Zarqa – home of former Al-Qaeda in Iraq leader Abu Musab al-Zarqawi – as well as Maan, Salt, and Irbid since the outbreak of the fighting in Syria.

As a result, Jordanian intelligence services are concerned that experienced militants with high improvised explosive device (IED)-building capability will return to Jordan with the intent of attacking the type of tourist, commercial, and economic targets of which the Al-Qaeda cell arrested in October 2012 were allegedly attempting. On its completion (scheduled for 2017), the Iraq-Jordan pipeline and its associated infrastructure would increase this target set, although there also is a high risk of attacks on construction crews actually building the pipeline. The length of the pipeline in Jordan will be approximately 1,000 km, buried one metre underground – although as militants in Yemen have displayed when they have dug up and attacked pipelines there, this does not necessarily make it any less vulnerable to attack. Hoewever, the deployment of sophisticated monitoring equipment and the rapid-reaction capabilities of the Jordanian armed forces will mitigate some of these risks. Metering and pumping stations will be located at Zarqa and Aqaba; a 3 million barrel capacity storage tank farm will be sited at Zarqa and a 7 million barrel capacity storage tank farm will be sited at Aqaba. Jordan's only oil refinery is also located at Zarqa.

Sites in Aqaba would also be vulnerable to rocket attacks by Islamist militant groups such as Ansar Bayt al-Maqdis based in the Sinai Peninsula aimed at the Israeli resort of Eilat. The most recent such attack took place on 12 August, but was intercepted by the Israeli Iron Dome missile defence system. However, on occasion in the past, such attacks have missed their target in Eilat and overshot, landing in adjacent Aqaba. With the building of the pipeline, and especially the storage tank farm, the risk of collateral damage from future rocket attacks will increase; that said, the storage tanks themselves will likely be hardened to prevent major damage making them able to withstand the relatively small 20-50 kg warheads on the Grad-type rockets used by Sinai-based militants, there will be an increased threat of collateral damage to pipe-work and control buildings.

Outlook and implications

Due to the substantial economic benefits the Iraq-Jordan pipeline will bring to Jordan, the project will become a high-profile target for militant attack in the future in the same way that the Arab-Gas pipeline in Egypt and the Kirkuk-Ceyhan pipeline in Iraq have been regularly targeted by militant groups seeking to disrupt energy exports from those countries. This will increase risks of supply disruption – although these would only likely last at most a few days given the ability to quickly repair damaged pipeline and pumping stations – and collateral damage to associated industries, especially in vicinity of the Zarqa refinery and Aqaba tank farm complexes.

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