Iran eyes resumption of oil swap operations Energy
Iran eyes resumption of oil swap operations
Iran, which ranks the fourth in the world for the volume of its proven oil reserves, is about to resume oil swap scheme with Caspian littoral states following a gap of more than five years.
Delegations representing Kazakhstan and Russia will pay a visit to Iran next week to consider the issue of resuming oil swap operations, Fars news agency quoted Seyyed Pirouz Mousavi, Managing Director of Iran Oil Terminals Company (IOTC) as saying.
The delegations will visit a new Neka oil terminal located 20km off the Neka city in Mazandaran province, south of Iran.
Mousavi mentioned that the Islamic Republic is planning to resume oil-swap operations with Caspian littoral states within one month. Some 50,000-100,000 barrels of oil per day is expected to be swapped at the initial stage, while the volume will be scaled up in the future.
Along with being the biggest terminal in the Caspian Sea for loading crude byproducts, Neka terminal is also considered to be the only facility with infrastructure relevant for oil swap and loading procedure.
Mousavi added that Russia and Kazakhstan have voiced readiness to proceed with delivering their crude to Iran in its northern terminals and receive equal volumes in the south.
He said talks with other littoral countries over the oil swap are underway, stressing that European oil companies working in Central Asia are interested in using the swap scheme with Iran to sell their oil to international markets.
Hamidreza Shahdoust, head of Iran’s North Oil terminal earlier said that Tehran is planning to turn capacity from the current 120,000 barrels per day up to 1.5 million barrels per day to implement swap operations with Caspian littoral states.
Iran started its oil swap with the Caspian Sea and Central Asian states in 1997 and it was in place until 2010. Under the agreement, Iran received crude from Azerbaijan, Kazakhstan and Turkmenistan in Neka for processing in its northern refineries and delivered an equivalent volume to the countries in the Persian Gulf. The procedure was suspended in 2010, on the grounds that the income from the swap was not sufficient for Iran.
Mahmoud Astaneh, a board member of Naftiran Intertrade Company (NICO) recently said that Iran is fully ready for a daily swap of around 300,000 barrels of oil at Neka terminal as all required domestic preparations are completed and necessary negotiations with foreign counterparts are underway.
The Islamic Republic exported 2.1 million barrels of crude oil, as well as 600,000 barrels of gas condensate per day in July, nevertheless the volume is still below the pre-sanctions level, which was 2.35 mbpd.