The National Iranian Oil Refining and Distribution Company and Tejarat Bank have signed a memorandum of understanding for building a pipeline to supply petroleum products to the country’s eastern region.
The MoU was signed on Sunday in Tehran between Jalil Salari, director of NIORDC, and Hadi Akhlaqi Feiz, managing director of Tejarat Bank, in the presence of Oil Minister Javad Owji and Economy Minister Ehsan Khandouzi.
With a capacity of 75,000 barrels (12 million liters) per day of various products, the pipeline will start from Mehraran County in Hormozgan Province, pass through the southern city of Fasa in Fars Province and finally reach Shiraz, the capital of Fars, the Oil Ministry’s news portal reported.
The 400-km-long pipeline, which will be funded by Tejarat Bank, will become operational in four years.
Using the pipeline as an alternative to oil transport by road will help create a south-east transport corridor. The project will ensure the sustainable supply of fuel required in the eastern parts of Iran, reduce transportation costs and facilitate the export of products to neighboring countries.
The project’s initial cost has been estimated at $200 million.
According to Salari, NIORDC signed a similar contract worth $525 million last month with Bank Mellat for laying a pipeline to supply petroleum products to Mashhad, the capital of Khorasan Razavi.
“The consumption of oil products in the northeastern region is about 15 million liters per day, which are transported by 1,000 tanker trucks, while 450 tanker trucks conduct exports. The construction of the pipeline will curb transportation costs and save about $500,000 per day,” he said.
The official noted that in six months, the pipeline will save $90 million and play a key role in ensuring energy security, controlling smuggling and increasing export to eastern neighbors.
Based on the NIORDC data, the output of petroleum products such as gasoline, diesel and kerosene increased by 6% in Iranian refineries last year compared to a year ago.
In 2020, refineries received 2.045 million barrels per day of feed, including crude oil and gas condensate, while the figure reached 2.710 million bpd in 2021.
This indicates a 6% increase in the feedstock of the country's refineries, which consequently led to a rise in the output of petroleum products.
Hauling oil products via pipelines reduces the possibility of delays that normally occur due to road closures when the regions are blanketed with snow.
One key advantage of using pipelines is in the environmental sphere. Pipelines cause very little, if any, damage to the environment or air pollution whereas the huge tankers and gas-guzzlers plying the national highways 24/7 emit excessive amounts of CO2 and worsen air pollution.
