Economic cooperation between Iraq and Jordan has grown significantly in recent months with energy officials from both sides now examining the possibility of constructing an oil pipeline between the two countries.

Iraq also held its fourth oil licensing round in Amman at the beginning of this month.

According to statistics from the Jordanian Ministry of Planning, Iraq's imports from Jordan in the first seven months of this year amounted to $646 million, while Iraq's exports to Jordan totalled $116 million.

Analysts said Iraqi-Jordanian relations are being boosted in the energy field after the two sides agreed last June to increase oil exported to Jordan to 15,000 barrels per day (bpd), up from 10,000 bpd.

Experts said Jordan's energy security is linked mainly to Iraq's supply of crude oil and heavy fuel oil, which Jordan will use, instead of gas from Egypt, for its power plants.

Saad Naji, secretary of the Iraqi Business Council in Jordan, said Iraq's fourth oil and gas licensing round was held in Jordan on September 11th.

"Holding such events in Jordan is proof of the distinguished relations between the two countries on the one hand, and of the will of the two sides to further enhance relations, especially in the field of oil, on the other hand," he said, noting that more than 46 international companies took part in the licensing round that included 12 areas in Iraq of about 5,000 square metres each, including three areas on the Iraq-Jordan border.

"If there is investment feasibility, a gas line will be extended across Jordanian soil to connect with the Arab gas line to meet Jordan's needs and export Iraq's gas via the Kingdom," Naji said.

According to Naji, the Iraqi Ministry of Oil is also examining the possibility of extending an oil pipeline from Iraq to Zarqa, northeast of Amman, to supply Jordan with oil.

Fayez Qaida, media spokesperson for the Jordanian Ministry of Energy and Mineral Resources, said Iraq and Jordan signed memorandums of understanding to examine the possibility of investing in joint gas fields, especially the Risha gas field on the border between the two countries, to supply Jordan with natural gas.

He said Iraq reached an agreement with Jordan to supply the Jordanian oil refinery with about 30,000 tons of heavy fuels a month beginning in September and to start implementing the contracts as soon as possible. He said the two sides agreed to form a joint committee to examine the construction of an oil pipeline extending across Jordan to meet the country's needs and export Iraq's oil.

In mid-September, Jordan's Minister of Energy and Mineral Resources Khaled Touqan discussed issues related to oil and gas agreements between the two countries with Iraqi Oil Minister Abdul Karim Laibi in the framework of an agreement signed by the two countries during Jordanian Prime Minister Maruf al-Bakhit's visit to Iraq last June.

The talks dealt with the formation of the joint committee to establish frameworks for cooperation in the oil sector, especially the potential oil pipeline from Iraq to the oil refinery in Zarqa.

Ahmed al-Abdullah, a member of the Jordan Chamber of Industry, noted the benefits of joint economic cooperation for both countries.

He said Iraq benefits from Amman in transit and trade-related issues and has exported 3.6 million barrels of crude oil to Jordan at a discounted price of $18 per barrel since 2006.

Al-Abdullah also called for broader cooperation between the two sides in view of the global economic recession.

"The two sides benefit from the Greater Arab Free Trade Area agreement, which facilitates the entry of goods and services and the movement of investments between the two countries," he said.