Caspian Fuel Swap Underway

Caspian Fuel Swap UnderwayCaspian Fuel Swap Underway

The private sector has started swap operations for diesel and liquefied petroleum gas from the Caspian Sea littoral states, managing director of the National Iranian Oil Refining and Distribution Company said on Monday.

"To cut transport costs for petroleum products from south to north, the private sector has embarked on swapping diesel and LPG from northern borders under the government's supervision," Seyyed Nasser Sajjadi was quoted as saying by Mehr News Agency.

"Kazakhstan and Turkmenistan are among countries engaged in swap deals," he said, adding that domestic fuel consumption has "significantly" risen compared to the hot season.

More than 200 million liters of petroleum products are distributed every day nationwide, according to data.

Dismissing concerns on the shortage of natural gas in winter, the official said the country's storage facilities are holding "high levels" of natural gas and other types of fuels.

Sajjadi added that Tehran is ready to swap Russian and Azerbaijani oil and gas, a subject of negotiations over the past few months.

"Swapping petroleum products in the cold season through Iran has commercial and economic advantages for most countries in the Caspian region," he said.

Tehran reached a landmark agreement with six world powers in July to curb its nuclear program in exchange for an end to sanctions that limited its trade and financial ties with the outside world.

Iranian oil officials discussed swap deals for oil, gas and petroleum products in November with a delegation of Russia's Rosneft in Tehran, in a closed-door meeting in which the two sides agreed to set up a joint committee to fast-track the swap agreements.

Deputy Oil Minister Hamidreza Araqi said last month that Iran is ready to start swapping around 300 million cubic meters of natural gas per day from Russia in the north to the southern terminals in the Persian Gulf.

Oil officials are also in talks with senior representatives from Azerbaijan about gas swap deals.

The State Oil Company of Azerbaijan Republic also said last month it is considering the possibility of swapping Russian gas to Iran, based on which Russia could deliver gas to Iran’s north and receive the same volume of gas from Iran’s south.

Iran hopes to raise gas export to 150-300 million cubic meters per day by 2021.