Russian oil major Lukoil is ready to invest $500-600 million in the construction of an oil pipeline from Iraq's West Qurna 2 terminal to Russian fields.

Speaking at the St Petersburg International Economic Forum, Vagit Alekperov, Lukoil President, told RT that both parties were interested in the deal. While Iraq needs to restore its oil and gas production and transit potential, Lukoil wants an extra oil pipeline to the terminal to produce 95 million tons a year at West Qurna 2.

"Iraq once had oil pipelines to the Mediterranean Sea and Ceyhan via Lebanon and Syria. Then there were thirty years of war, the Iranian-Iraqi war in the south, which ruined the entire infrastructure, then there followed years of blockade, then there was a war for the liberation of the Iraqi people from the Saddam Hussein regime, so it is only natural that the infrastructure has gone obsolete, it needs modernization and an increase in production capacities."

Alekperov added that given the global outlook Iraqi supply would be in demand.

“If you take into consideration the 12 contracts of the 1st round which were presented in the tender that Gazprom and Lukoil took part in, they are being realised and it will amount to 12 million barrels per day in 7 years. Today Iraq produces 4-5 million barrels so this will triple that amount to more than 500 million tonnes. I think that growth rates of oil usage will remain at the same level. South East Asia is using more and more oil products and it will keep using them to meet the demand of its economy. We hope that it will all balance out. But the production volume in Iraq will undoubtedly be significant.”

The Iraqi government is currently considering Lukoil's offer, though Alekperov noted that Iraq might prefer to do without help.

"They have not yet answered in the negative, but at the same time the Iraqi ministry of oil wants to develop these projects by itself."