Iran to Build Oil Storage Tanks in Jask Port
An agreement has been signed between three Iranian companies for the construction of 10-million-barrel crude oil storage tanks and utilities in Jask Port. The Build-Operate-Transfer (BOT) contract was signed between Touraj Dehqani, CEO of Petroleum Engineering and Development Company (PEDEC), and Asghar Gorzin, CEO of Petro Omid Asia, and Ahmad Ebrahimi, CEO of Omid Investment Management Group.
Under this trilateral deal, 1 mb/d of crude oil would be transferred from Goureh oil terminal in Bushehr Province in southern Iran to Jask off the Sea of Oman. That would help Jask shot to prominence as the second oil export terminal in Iran.
With an initial investment of €200 million, the project will come online over three years. That would require the investor to finance and design the project, supply required commodities and equipment, and construct storage facilities. After that, the investor is required to be accountable for maintenance for a 15-year period. After 18 years, the storage site would come under ownership of National Iranian Oil Company (NIOC).
6mb/d Oil Output Capacity
Ali Kardor, CEO of NIOC, said Iran had potential to reach 6mb/d oil production capacity.
“Currently we can allocate 2.5 mb/d of oil to domestic refineries. With reliance on new investments the figure could be raised to 3 mb/d, and in this way we could also store surplus oil produced in the country,” he said.
Development of the Makran area, due to its proximity to East Asia, can contribute to diversification in Iran’s export terminals. Kharg Island is currently the main export terminal in Iran.
A chain of activities is needed for the transfer of crude oil from Goureh to Jask.
“Contractors in each and every segment of this chain are required to comply with timeframe set forth in order to prevent any delay in the implementation of the project,” said Kardor.
“Given Iran’s plans to raise crude oil production capacity and develop crude oil storage tanks, construction of storage tanks will be done in two phases; in the first phrase, the storage capacity stands at 10 million barrels and in the next phase it will double to 20 million barrels,” he added.
“Since 2014, NIOC has focused on the strategy of outsourcing. To that end, it has assigned the private sector operation of an oil field, liquefied natural gas (LNG) projects, as well as power plants,” Kardor said.
He said the deal signed for oil storage tanks at Jask was an instance of the private sector’s involvement in oil projects.
“I hope that Petro Omid Asia Co. and Omid Investment Management Group would go ahead with this project as planned,” said Kardor.
No Plan to Cut Output
Kardor dismissed speculation about plans by Iran to reduce its oil production.
“NIOC has access to its whole oil income and this year we have even experienced growth in revenue gained from selling crude oil,” he said.
Kardor added that NIOC was easily receiving money for crude oil shipments.
He also said that the Iranian Ministry of Foreign Affairs and the European Union were in talks to develop models to be applied under different circumstances.
Asked about any new deal under the newly developed Iran Petroleum Contract (IPC), he said: “We are currently in talks and we may sign our next contract with a consortium comprising Russian companies.”
Asked about insurance coverage for oil cargoes, Kardor said: “We are currently handling this procedure completely by ourselves and we have accepted to hedge risks.”
Oil, Gas Fields Development
Petroleum Ministry senior official Marzieh Shahdaei said petroleum industry is instrumental in Iran’s economy due to its big share in national revenue.
“The Ministry of Petroleum and NIOC have worked out mechanisms for this industry to remain dynamic. That would help us make gains from oil sales in addition to upgrading and stabilizing Iran’s standing within OPEC and world markets,” he said, referring to the Organization of the Petroleum Exporting Countries.
Referring to the development of oil and gas fields in Iran, Kardor said: “Development of the jointly owned South Pars gas field is still under way. We will see new phases come online this year and next year to contribute further to gas production.”
Shahdaei said NIOC was in talks with Iranian and foreign companies for the development of oil fields.
“Enhancing crude oil production capacity and building this terminal, we will be able to bring diversity to our crude oil export terminals,” she added.
“Earlier, the Ministry of Petroleum had started development in the Persian Gulf. Now it is pioneering development in Makran,” said Shahdaei, a former CEO of National Petrochemical Company (NPC).
She noted that implementing major oil projects would require domestic and foreign investment.
“However, sanctions provided a proper chance for further benefiting from domestic potential. We have to take advantage of these potentialities in the best possible way,” she said.
Maximum Use of Domestic Potential
Dehqani said PEDEC was determined to make maximum use of domestic manpower in developing Makran area and implementing the Goureh-Jask oil transfer pipeline project.
“The planned construction of oil storage tanks in Jask Port is part of the Goureh-Jask oil transfer project. This project is being followed up on seriously and will result in national development in southeast,” he added.
“In addition to the development of this sector, diversifying oil export origins and feedstock supply to downstream units are targeted in this project,” said Dehqani.
He said the Goureh-Jask oil transfer project and its utilities were estimated to cost $2 billion. “This project includes building of about 1,000 kilometers of pipeline, five roadside pumping stations, measurement and mechanical tools, oil storage tanks as well as an export jetty,” he added.
Access to high seas and big oceans, proximity to Indian subcontinent countries as well as the great Indian and Chinese markets, linking Central Asia, Russia and Afghanistan to high seas and the Indian Ocean via North-South Corridor, desirable sea depth, attractive and diverse beaches, geopolitically strategic and unique location, investment-friendliness and being potentially able to house economic and development projects and proximity to the Persian Gulf, and giant proven oil and gas resources, are among features of the Makran area.