Identifier
Created
Classification
Origin
03KUWAIT5454
2003-12-03 09:07:00
CONFIDENTIAL
Embassy Kuwait
Cable title:  

(U) IRAQ: KUWAIT WANTS TO INCREASE "HUMANITARIAN

Tags:  ETRD EAID EPET PREL PGOV MOPS KU IZ 
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This record is a partial extract of the original cable. The full text of the original cable is not available.
C O N F I D E N T I A L SECTION 01 OF 02 KUWAIT 005454 

SIPDIS

STATE FOR NEA/FO, NEA/ARP, NEA/NGA, EB/ESC, EB/ESC/IEC
STATE FOR EB/ESC/IEC/EPC, EB/TPP/BTA/ANA
NSC FOR THEROUX

E.O. 12958: DECL: 12/02/2013
TAGS: ETRD EAID EPET PREL PGOV MOPS KU IZ
SUBJECT: (U) IRAQ: KUWAIT WANTS TO INCREASE "HUMANITARIAN
FUEL" DELIVEREIS TO IRAQ, NEEDS DETAILS ON QUANTITIES

Classified By: Charge d'Affaires Frank C. Urbancic, Reasons
1.4 (b) and (d)

C O N F I D E N T I A L SECTION 01 OF 02 KUWAIT 005454

SIPDIS

STATE FOR NEA/FO, NEA/ARP, NEA/NGA, EB/ESC, EB/ESC/IEC
STATE FOR EB/ESC/IEC/EPC, EB/TPP/BTA/ANA
NSC FOR THEROUX

E.O. 12958: DECL: 12/02/2013
TAGS: ETRD EAID EPET PREL PGOV MOPS KU IZ
SUBJECT: (U) IRAQ: KUWAIT WANTS TO INCREASE "HUMANITARIAN
FUEL" DELIVEREIS TO IRAQ, NEEDS DETAILS ON QUANTITIES

Classified By: Charge d'Affaires Frank C. Urbancic, Reasons
1.4 (b) and (d)


1. (C) SUMMARY. Officials from Altanmia, the Kuwaiti
consortium transporting humanitarian fuel to Iraq under
contract to KBR, have told CPA and KBR representatives that
they are willing and able to deliver more fuel to Iraq, and
that the GOK considers this a high priority. Increases in
most fuel types can be made immediately up to 4 million
liters/day of gasoline and 9 million liters/day total,
including diesel and kerosene. Further increases can be made
following some technical modifications, all of which would be
paid for by Altanmia but would be economical only if demand
stays high in the medium term. However, the Kuwaitis need a
clear idea of what quantities and types of fuel Iraq
requires, and for how long. CPA/KBR did not have specific
figures for the Kuwaitis as of December 1, although KBR
representative Stoney Cox said that he would obtain them by
December 5. CPA Senior Advisor to the Oil Minister Rob McKee
stressed the urgency of this operation, with only 2-6 days'
worth of stocks in Iraq and winter approaching. It is
apparent that the GOK has told Altanmia to do whatever is
necessary to avoid a hydrocarbon shortage in Iraq. Altanmia
is awaiting instructions from the US on what fuels are needed
and at what volume. If hydrocarbons are needed in Iraq, the
GOK is ready to meet the requirement, but somebody has to ask
them. END SUMMARY.



2. (C) On December 1, CPA's Senior Adviser to the Oil
Minister Rob McKee and Kellogg Brown and Root's (KBR) Stoney
Cox met in Kuwait with representatives of Altanmia, the
Kuwaiti company responsible for transporting humanitarian
fuels to Iraq; A/DCM and EconOff (notetaker) sat in. The
meeting followed an earlier visit by McKee and two other CPA

officials, who met with Altanmia, GOK officials and the head
of Kuwait Petroleum Corporation (KPC) on November 24. At
both meetings, the participants discussed Kuwait's provision
of humanitarian fuel aid to Iraq and difficulties that have
prevented Kuwait from supplying greater quantities.
According to Altanmia's Waleed Al-Humaidhi, one of the major
obstacles they have faced thus far has been KBR's inability
to determine the actual need, which prevents Altanmia from
planning to fill it. He also noted that the turnaround time
for trucks in Iraq was very inefficient, with trucks waiting
for days for convoys to return to Kuwait. He asserted that
security was the main bottleneck.


3. (C) At the December 1 meeting, McKee informed Altanmia
that he had been successful in reducing some of the
logistical impediments (including securing a commitment to
run more convoys each day). He also indicated that the USG
would like to take advantage of Kuwait's spare capacity to
supply Iraq with a greater volume of fuel. McKee said that
Iraq was facing a crisis as winter approached and stocks
dwindled to 2-5 days' worth of fuel. However, neither McKee
nor Cox provided the Kuwaitis with specific information about
the quantity or types of fuel that they were seeking. Cox
said that he hoped to have this information by December 5.


4. (C) Altanmia told Cox and McKee that ramping up to
provide additional fuel would not be a problem. Al-Humaidhi
specified the following volumes available for each product:

-- Kerosene: Kuwait can load 1.7 million liters/day of
kerosene within 72 hours. Supply can be further increased if
the US military allows Altanmia to use two pipelines that run
through air bases used by the US. These pipelines are
currently being used by the US military at only 25-30%
capacity. If the US military agrees, KPC will pay to install
gauges and meters, and establish separate filling pumps for
Altanmia. Alternatively, Al-Humaidhi proposed that the US
military could use the line at Ali al-Salem airbase, with
Altanmia using the other at Ahmed al-Jaber airbase, currently
not in use by the US. Cox said he would ask the military if
Altanmia can use the 75% of capacity that is going unused.

-- Mogas (aka benzene, aka gasoline): Altanmia can provide
up to 9 million liters/day of mogas, but not immediately.
Although there are sufficient vehicles to transport the fuel,
there is insufficient local storage space that could be used
if production outpaces deliveries. Altanmia can lift up to 4
million liters/day of benzene with no additional investment.
With investments in containment vessels, Kuwait can increase
benzene supplies to 9 million liters/day (Kuwait lifted up to
15 million liters/day during the Iran-Iraq war).

-- Diesel: Altanmia can provide 1-1.5 million liters/day
within 7-10 days (with some modifications needed, similar to
those for kerosene deliveries). They can ramp up to 4
million liters/day within 2-3 weeks.


5. (C) Altanmia officials stressed that they need a clearer
idea of Iraq's longer term fuel needs. They asked whether
Kuwait would simply be surging to meet shorter-term, seasonal
supply shortfalls, or if the provision of humanitarian fuel
supplies would be a longer, continuous operation.
Al-Humaidhi underscored that the Kuwaitis are willing and
able to do either. If the US says that only a surge in
production is needed for the winter months, Kuwait can can
provide 5-7 million liters/day of mixed fuels within days,
increasing to 9 million liters/day of mixed fuels within
weeks. If, on the other hand, the US projects that there
will be a longer-term need, Altanmia will make several
investments at their own expense. Al-Humaidhi outlined
Altanmia's tentative plans to revamp the abandoned Kazima
loading depot, located near the Iraqi border. The depot
would be linked by pipeline to large-capacity storage barges
offshore, which would solve the containment dilemma that
Kuwait would face at higher production levels. Al-Humaidhi
said that the Prime Minister has indicated that fast-tracking
approval of the Kazima renovation project within 48 hours
could possibly be undertaken on an emergency basis, with
further discussion. The renovation can be completed within
45-60 days using local contractors, or less with US military
support. Al-Humaidhi reiterated that Altanmia would make
these investments at no/no cost to the US, and with no need
for a US commitment on quantities of fuel to be delivered to
Iraq. However, Altanmia will not undertake such a large
financial commitment if Iraq only needs increased fuel
supplies for this winter. Again, Al-Humaidhi emphasized that
they simply need a clearer picture of what quantities and
types of fuels are needed, so that they may make the
necessary logistical arrangements. He noted that the
Government of Kuwait supports the US operation in Iraq "110
percent." GOK officials are perplexed that despite the GOK's
willingness to do whatever it takes to get supplies into
Iraq, the US continues to ignore this Kuwaiti offer, while
purchasing fuel supplies from non-producing countries such as
Jordan and Turkey.


6. (C) COMMENT. It is clear from both meetings that
Altanmia is under firm orders from the highest levels of the
GOK to provide Iraq with whatever fuel it needs. Although
hte volumes and time lines for provision of the several fuels
shift slightly from one scenario to another, the intent is
clear. The overriding goal of the GOK is to ensure that
there is no hydrocarbon shortage in Iraq, and the GOK
believes Kuwait is best positioned to ease Iraq's fuel
crisis. However, Altanmia needs to know what quantities of
each type of fuel are needed, and for how long. Altanmia has
already demonstrated its determination to make this work --
for example, Altanmia has absorbed penalties levied by the
Kuwait Petroleum Corporation when KBR did not order the
quantities of fuel it had indicated it would. But it is
imperative that CPA provide the Kuwaitis with a clear outline
of quantities and types of fuel that Iraq needs, and an
estimate of how long Iraq will require fuel exported from
Kuwaiti, so that the Kuwaitis can increase fuel deliveries.
END COMMENT.


7. (U) Mr. McKee did not clear this cable.


8. (U) Baghdad minimize considered.
URBANCIC