Syria and Iraq have agreed to reopen the oil pipeline linking Kirkuk in Iraq's northern oil fields to Syria's port city of Banias in the Mediterranean Sea which means the Iraqi pipeline carrying Kirkuk oil to Ceyhan will have a rival.

The agreement was included in the minutes of bilateral meetings on Monday, signed by Syrian Deputy Premier for Economic Affairs Abdullah Dardari and his Iraqi counterpart Barham Ahmed Saleh, covering cooperation between Syria and Iraq in the fields of transport, oil, gas, banks, infrastructure, technology and communications.

The two sides also encouraged competent engineering companies to offer tenders for establishing tanks to exchange oil products in the border region of al-Yarubya.

The two sides also agreed to establish a Syrian-Iraqi business council during the next meetings of the committee due to be held in February 2008 and make use of the rules of an agreement on protecting and encouraging investments between the two states.

Syrian public constructional companies will contribute to rebuilding Iraq, putting executive mechanisms to establish a joint company for infrastructure in Iraq and activate cooperation in the fields of communication and technology, said the report.

The pipeline --------------------ARA BASLIK

Syria's oil minister said the 300,000 barrels per day capacity pipeline will be operational within two years but needs repairs in Iraq.

Syrian Oil Minister Sufian Allaw said a Russian company would travel to Iraq on Jan. 10 to inspect the pipeline for needed repairs. "It's ready to pump oil from the Syrian side, but the pipeline still needs some repair from the Iraqi side," Allaw said.

Iraq has invited Russia's Stroytransgaz to submit an offer to re-activate the pipeline , Iraq's Deputy Prime Minister Saleh said. The Russian com pany will make its offer by January 10.

Syria, which allied itself with Iran in the 1980-88 Iran-Iraq war, shut down the pipeline in 1982. It reopened in late 2000, as relations with Baghdad thawed, but was closed again with the 2003 U.S. invasion of Iraq after the Americans bombed the pipeline on the Iraqi side.

Saleh did not reveal a timetable for the repairs, but said security in the northern and western Iraqi areas where the 800 km (550 mile) pipeline runs has improved.

"We have a timeline set for work on the pipeline, which will expand our oil export options. Our oil export volumes so far have been unacceptable," Saleh said.