Foreign Relations of the United States, 1955–1957, Near East Region; Iran; Iraq, Volume XII

268. Memorandum From the Assistant Secretary of State for Near Eastern, South Asian, and African Affairs (Rountree) to the Secretary of State¹

Washington, October 9, 1957.

SUBJECT

• NSC 5722—Construction of a New Middle East Petroleum Pipeline System

Discussion:

The petroleum industry proposed several months ago to construct a pipeline from the head of the Persian Gulf through Iraq and Turkey to the Mediterranean to facilitate the movement of Persian Gulf petroleum to Western Europe. The first phase of construction would result in an installation capable of moving 800,000 barrels per day; completion of the second phase would result in a line with a total capacity of 1,400,000 barrels per day.

Within the past few days information has come to the attention of the Department² which indicates some petroleum companies now believe that certain developments since last spring reduce the immediate economic need for proceeding at this time with plans to construct a pipeline from the head of the Persian Gulf through Iraq and Turkey to the Mediterranean. These developments include the following:

1. A smaller increase in demand in Western Europe than had been expected.

2. Certain recent decisions by the Iraq Petroleum Company which reduce the amount of oil for the new pipeline by 350,000 barrels per day:

a. Decision to increase the capacity of its lines across Syria by 10 million tons (200,000 barrels per day);

b. Decision to construct a deep water tanker loading facility in the Persian Gulf off southern Iraq which would increase the movement of oil at that point by 150,000 barrels per day. Although the Department does not know the extent to which these views are shared by the companies concerned, action by the Council on NSC 5722 does not appear necessary at this time. Accordingly consideration by the NSC of the draft policy has been deferred at the Department’s request.

Recommendation:

If asked in the Council to give the reasons for the Department’s request to defer consideration of the draft policy, you may wish to use the foregoing information.

1. Source: Department of State, S/P–NSC Files: Lot 61 D 167, Middle East Petroleum Pipeline System, Construction of; NSC 5722. Secret. Drafted by Shaw and concurred in by Murphy, Jones, Mann, Dillon, and Raymond.
2. Dillon discussed this matter at the Secretary’s Staff Meeting on October 4. (Ibid., Secretary’s Staff Meetings: Lot 63 D 75) Additional documentation is Ibid., S/P–NSC Files: Lot 61 D 167, Middle East Petroleum Pipeline System, Construction of; NSC 5722.