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Iran to Propose Oil Swap Resumption to Kazakhstan

Iran to Propose Oil Swap Resumption to KazakhstanIran to Propose Oil Swap Resumption to Kazakhstan

Iran is preparing a proposal to Kazakhstan on resumption of oil swap operations and transit utilizing the potentials in Aktau and Neka terminals, off the Caspian Sea.

"The potentials of Neka Oil Terminal, as Iran's biggest terminal off the Caspian Sea, will be presented in the near future in an exhibition in Aktau, Kazakhstan," Seyyed Pirouz Mousavi, managing director of Iran Oil Terminals Company, said.

Aktau Terminal, located on the Mangyshlak Peninsula and in the Mangystau Region, enjoys robust infrastructure and operational capacities that can be utilized to export and swap Iranian oil and other petroleum products, Mehr News Agency quoted the official as saying.

Currently, three development projects are being implemented in Neka Terminal to boost oil swap operations with the Caspian littoral states. The development plans are projected to increase the oil swap capacity of Neka Terminal from the current 120,000 to 500,000 barrels per day in the initial phase, and then to 1.5 and 2.5 million bpd in later phases.

The terminal’s development is reportedly ahead of schedule with approximately 25% progress as of May.

The project is slated to be completed by June 2016. Plans call for design and construction of 13 docks for berthing tankers of up to 63,000 tons capacity. Neka Oil Terminal is located 20 km off the city of Neka, in the northern Mazandaran Province.

The Caspian Sea’s 143,200 sq miles are bordered by five states—Kazakhstan, Turkmenistan, Azerbaijan Russia and Iran. In and around the Caspian basin lie an estimated 48 billion barrels of oil and 292 trillion cubic feet of natural gas.

Aktau Terminal is a strategic location for oil transit in the Caspian region, given its interconnection with other oil terminals in the region, including the Makhachkala Sea Port, in Dagestan Republic, southwestern Russia, Astrakhan Oil Terminal in the southern European Russia on the banks of Volga River, and Baku Port in Azerbaijan.

 Advantages

Kazakhstan, with massive oilfields in northern Caspian Sea, is also connected to Black Sea and Mediterranean Sea via Volga Canal.

As one of the five Caspian littoral states, Iran borders Sea of Oman and Persian Gulf in the south, and could be a transit route for moving energy from the Caspian Sea, which has no direct access to the international waters and the world markets.

Oil swap can be an important source of revenue, as the northern neighbors with abundant hydrocarbon resources need access to sea lanes. According to reports, Iran swapped more than 254 million barrels of oil over 13 years that generated $880 million in revenues, the news agency said.

However, obstacles prevented Iran from benefitting from the deals as had been expected, including the economic sanctions imposed by the US-led western states  over Tehran’s nuclear program , Russia’s rivalry with Iran over controlling energy export routes and political and economic instability in some regional countries.

Iran started crude oil and gas swaps with its neighboring countries in 2000, but the former administration of president Mahmoud Ahmadinejad decided to halt swap operations in 2010.

Financialtribune.com