Petropars Group, a subsidiary of the National Iranian Oil Company, has signed a contract with the Venezuelan state oil company PDVSA to upgrade the country’s largest crude oil exporting terminal, the head of the group said.
“This is the first international EPC [engineering, procurement and construction] contract signed by an Iranian company and is expected to expand the company's chain of activities in global markets,” Mohammad Sadeq Azimifar was also quoted as saying by the Oil Ministry’s news portal.
The EPC deal was signed on Thursday in Caracas by Iran’s Oil Minister Javad Owji and his Venezuelan counterpart Pedro Rafael Tellechea.
As per the agreement, Petropars is obliged to renovate and overhaul Jose Terminal, located in northeastern Venezuela, within one year.
The facility is by far the most important crude oil loading point in the country, accounting for nearly 90% of oil export loadings.
Oil exports are the financial backbone of Venezuela’s economy, which is struggling to overcome inflation, a longstanding recession and scarcity of essential goods.
According to the Petropars chief, the storage capacity of the terminal will increase through the repair, construction, completion and reconstruction of storage tanks, comprehensive maintenance and repair of pump stations in the form of an EPC contract financed by the Venezuelan side.
Tehran has strengthened ties with Caracas in recent years, providing crude and raw materials for Venezuela's aging refining network, and overseeing a project to modernize the largest refining complex in the country.
Strategic Cooperation
Iran and Venezuela, the two nations hit by US sanctions, signed a document of comprehensive 20-year strategic cooperation during President Nicolas Maduro’s visit to Tehran last June.
Since 2020, the two countries have expanded cooperation, particularly for energy projects and oil swaps, helping the Caribbean nation ease the effect of Washington’s measures.
As reported by the Public Relations and International Affairs Office in Petropars Group, the history of cooperation with PDVSA dates back to the engineering study of Ayacucho Blocks 1-4, as well as the evaluation and submission of proposals for participation in the heavy crude oil block development project in the Dobokubi Oilfield in Venezuela.
Around 20% of the world's oil reserves are located in Latin America.
Petropars was founded in 1998 to help develop Iran’s vast energy resources and is one of the leading contractors of upstream oil and gas projects. It has recently been tasked with the development of the giant South Azadegan Oilfield in Khuzestan Province and Belal Gas Field off the Persian Gulf.
Last October, Reza Noshadi, managing director of the state-run Iran Gas Engineering and Development Company, and Juan Santana, deputy CEO of PDVSA, discussed cooperation in Tehran.
Talks were mainly focused on supplying Venezuelan gas industry with high-quality Iranian equipment.
In the meeting, Santana said PDVSA was interested in drawing on Iran's experiences in LNG production projects, gas liquefaction, construction of gas pressure boosting facilities, gas processing plants and pipe-laying schemes.
Iran has also sent five tankers to Venezuela in recent years, delivering 1.53 million barrels of Iranian gasoline to the Latin American country.
After the collapse of Venezuela's oil refining industry and 2019 sanctions imposed by the United States preventing fuel suppliers from sending gasoline to Venezuela, the country experienced a chronic shortage of gasoline.
Aframax Tankers
Iran has so far delivered two domestically manufactured Aframax oil tankers to Venezuela.
Aframax has a deadweight of about 100,000 tons and can carry 113,000 tons of crude oil equivalent to 750,000 barrels.
Each 250-meter-long vessel is equipped with a 21,000-horsepower engine and three diesel generators that are capable of producing 900 kilowatts of electricity.
The delivery has been part of arrangements between the two countries to counter American sanctions targeting their oil sectors.
According to a contract signed by the two sides, Iran is to build and deliver two more oil tankers to Venezuela.
Due to their favorable size, Aframax tankers can serve most ports in the world. These vessels serve regions that do not have very large ports or offshore oil terminals to accommodate very large crude carriers and ultra-large crude carriers.
The construction of Aframax oil tankers based on international standards is indicative of Iran's technological prowess in the field.
The tankers were manufactured by the Iranian Marine Industrial Company (Sadra), whose shipbuilding yards are situated along the Persian Gulf coast in Bushehr Province. Founded in 1968, it has established itself as a leading shipbuilding and ship repairing company in Iran. It is also active in offshore oil and gas development.
The company, which is a sister company of Iran Shipbuilding and Offshore Industries Complex Company, specializes in building ships, docks and floating oil rigs.
