The National Iranian Oil Refining and Distribution Company and Bank Mellat have signed a memorandum of understanding for the construction of a pipeline to supply petroleum products to the country’s eastern region.
With a capacity of 150,000 barrels (24 million liters) per day of various products, the pipeline will start from Rafsanjan County in Kerman Province, pass through Birjand in South Khorasan and Torbat Heydariyeh in Khorasan Razavi and finally reach Mashhad, the capital of Khorasan Razavi, IRNA reported.
The construction of the 948-km-long pipeline will be financed by Bank Mellat that is actively involved in the oil industry's major projects.
Using the pipeline as an alternative to oil transport by road will help create a south-northeast transport corridor. The project will ensure the sustainable supply of fuel required in the eastern and northeastern parts of Iran, reduce transportation costs and facilitate the export of products to neighboring countries. The project’s initial cost has been estimated at $425 million.
“The consumption of petroleum products in the eastern and northeastern regions is about 15 million liters per day, which are transported by 1,000 tanker trucks, while 450 tanker trucks conduct exports,” the director of NIORDC said at the signing ceremony.
“The construction of the pipeline will reduce transportation costs and save about $500,000 per day,” Jalil Salari was also quoted as saying by IRNA.
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.
According to the official, the pipeline can help develop downstream industries in eastern Iran, like the West Ethylene Pipeline in the western regions.
Extending from the southern Asalouyeh along the Persian Gulf to the northwest, WEP is a 2,800-kilometer pipeline that supplies ethylene as feedstock to 13 petrochemical factories for producing value-added commodities worth $2 billion per year.
Output of Petroleum Products
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.
NIORDC’s gasoline output capacity has increased from 56 million liters per day in 2010 to the current 115 ml/d.
The company now produces 125 million liters of diesel per day, which is 31% more than 2010 when the volume was 95 ml/d. Both products meet international standards.
The largest share of oil byproducts refined and distributed by the company includes assorted grades of liquid petroleum, namely gasoline, jet fuel, diesel, heating oil and heavy fuel oils.
