Investment Opportunity

 

Iran's petrochemical industry has embarked on an accelerated move towards development of capacities for basic polymer production and it has made breakthroughs. The last one was the start-up of Mehr Petrochemical Plant with the contribution of foreign investors and privately-owned Ghadir Petrochemical Plant.

New projects under way by the National Petrochemical Company of Iran, including propylene feedstock supply by Salman Farsi Petrochemical Plant, has created a good opportunity for the development of production of polypropylene and other products of high value.

In light of the fact that basic polymer production has surpassed its consumption in Iran, the start-up of new facilities and strong presence in export markets is a possible option.

The NPC is making efforts to supply the required petrochemical raw materials in the country in order to build new capacities and privatize production units with a view to accomplishing its task of expansion of oil and gas chain value.

In the meantime, feedstock supply to petrochemical plants is especially sensitive because experts believe that this industry can create investment capacities for each single dollar in investment. Development of petrochemical industry will also serve the machinery and chemical industries.

Petrochemical decision-makers welcome domestic and foreign investment in the petrochemical sector. Supporting construction of petrochemical plants with the collaboration of foreign companies is among plans which will develop domestic capacities.

Currently, almost all NPC projects are under way with the contribution of the private sector.

The government has to pursue petrochemical development plans with serious determination.

The involvement of the private sector in decision-making and planning can happen within the framework of industrial bodies. Then, foreign companies active in the petrochemical industry would be able to take advantage of this opportunity for investment in Iran's petrochemical industry.

Second Presence at SCO Summit

Entering World Markets through Energy Diplomacy

 

The Shanghai Cooperation Organization (SCO) is a Eurasian political, economic and military organization which was founded in 2001 in Shanghai by the leaders of China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan. Except for Uzbekistan, the other countries had been members of the Shanghai Five, founded in 1996; after the inclusion of Uzbekistan in 2001, the members renamed the organization.

The Shanghai Five grouping was originally created on 26 April 1996 with the signing of the Treaty on Deepening Military Trust in Border Regions in Shanghai by the heads of states of Kazakhstan, the People's Republic of China, Kyrgyzstan, Russia and Tajikistan. On 24April 1997, the same countries signed the Treaty on Reduction of Military Forces in Border Regions in a meeting in Moscow.

Cooperation in the security, economic and cultural sectors and serving as a counterweight to NATO are among the main tasks of SCO. In 2004, Mongolia was granted observer status at SCO and one year later, Iran, Pakistan and India become observer states. SCO member states make up 25 percent of the world population.

Some analysts maintain that the SCO will in the near future envisage accepting Iran as a member state given the country’s growing strength in the region and its strategic position in connecting Central Asia and the Persian Gulf.

Due to the significance of this organization and its decisions, Iranian President Hassan Rouhani led a high-ranking political and economic delegation to the SCO summit.

Rouhani embarked on a five-day trip which took him first to Kazakhstan and then to Tajikistan where the SCO summit was held on September 12. During his trip, Rouhani met with the leaders of SCO member states.

It was the second time that President Rouhani attended the SCO summit since he took office in August 2013.

Private meeting between Rouhani and his Tajik counterpart Emomalii Rahmon, meeting with Tajik prime minister and spokesman of parliament, bilateral talks between Iranian and Tajik officials, signature of documents for cooperation, meeting with the SCO secretary general, delivering a speech to professors and students and meeting with Iranians living in Tajikistan were among the programs of Rouhani’s visit.

Rouhani also inaugurated the second generating unit of an Iranian-financed hydroelectric power plant in Tajikistan.

Rouhani and Rahmon led the inauguration of the second turbine at Sangtuda-2 hydropower plant via videoconference in the Tajik capital city of Dushanbe on September 10.

Tehran believes that countering international sanctions should become a principle of the SCO and its member states.

 

Four-Nation Transit Corridor

 

President Rouhani told the SCO summit that energy, water and access to world markets contribute to regional stability and development.

He said Iran-Turkmenistan-Kazakhstan railroad is expected to become operational by December.

The Iranian president added that construction of Iran-Turkmenistan-Uzbekistan-Oman transit corridor is also starting in order to facilitate connections between Central Asia and the Persian Gulf through Iran.

Rouhani said the four-nation corridor will provide the SCO with an advanced connection route stretching from the Persian Gulf to the Indian Ocean and then to the China Sea.

“Enjoying huge energy reserves and a strategic position, the Islamic Republic of Iran has managed to play a fundamental role in regional convergence,” he said. “It is clear that without Iran’s role and contribution, designing energy transit corridors in the region will have no economic justification.”

He also referred to the issue of terrorism and extremism, saying: “In last year’s summit, I talked about extremism, terrorism and international organized crimes and I described them not only as a major challenge to SCO security, but a global challenge. I brought up the issue at the UN General Assembly too and I feel happy that this anxiety won international consensus and resulted in the adoption of a resolution about fight on violence and terrorism.”

“Now, one year has passed and the world is realizing more and more the depth of this warning and the hazards of this ominous phenomenon,” said Rouhani.

The Iranian president said most SCO member states are facing the “threat of extremism and terrorism.”

“Therefore, organized planning, bilateral or multilateral cooperation, political interaction and intelligence sharing and dealing with cultural and economic poverty and the support of the [SCO] member states for these measures are the only way to confront this crisis and go through growing problems,” he said.

Rouhani said the current spiraling crisis, created due to the activity of extremist and terrorist groups, in the region could be contained under the aegis of regional and international joint actions or it will spill over to outside the region.

“The international community needs interaction, friendship, peaceful coexistence of nations and ethnicities under the aegis of moderation, and establishment of peace needs confronting violence and negating extremism,” said the president.

Rouhani said the ongoing political conditions in Afghanistan have worried the SCO member states, expressing hope that the organization will help Afghan people and political groups see stability and security.

“While security is the most important cause of concern for the world countries, including SCO members, regional stability and development and national welfare are other important issues which need to be taken into account,” he said, adding that the SCO has to work out effective mechanisms for regional and international affairs.

“Undoubtedly, establishment of stability and security in the region requires economic, social, cultural and political development along with intelligence and security measures. Therefore, that would be a long-term solution for eradicating terrorism,” Rouhani said.

 

Rouhani-Putin Meeting

 

Rouhani and Russian President Vladimir Putin met on the sidelines of the SCO summit and called for the expansion of relations between the two countries in all areas of interest.

Rouhani said Iran and Russia are maintaining strategic relations, noting that the grounds are prepared for the two countries to broaden cooperation in economic, trade, scientific and technological sectors.

Putin also said that Tehran-Moscow relations are growing and noted that new agreements are expected to be signed between the two countries.

 

Meeting With Chinese, Afghan Presidents

 

Rouhani held separate meetings with Chinese President Xi Jinping and Afghan President Hamid Karzai.

In the meeting with Xi, Rouhani called for the implementation of agreements Tehran and Beijing signed in the past. Rouhani also highlighted strong ties between Iran and China.

Xi referred to Iran’s important position in the region and the world and said China looks for strategic relations with Iran. The Chinese president also said he would travel to Iran next year.

In his meeting with Karzai, Rouhani underscored the significance of stability and peace in Afghanistan and said: “The realization of Afghan people’s will is the most important factor in the development of this country and Iran is ready for any kind of assistance in this regard.”

Rouhani and Karzai discussed the future of Afghanistan and the role of regional countries and trans-regional powers.

 

Tehran-Ashgabat Ties

 

In a meeting with his Turkmen counterpart Gurbanguly Berdimuhamedow in Dushanbe, Rouhani said the Islamic Republic is ready to offer help to Turkmenistan to develop its infrastructure.

Iran is also ready to provide the Central Asian country with required commodities and products, Rouhani said.

“Iran and Turkmenistan are two neighboring and brotherly nations with common roots, and it is necessary that they utilize their untapped potential in bilateral ties,” Rouhani said.

He called for the presence of Iranian entrepreneurs and investors in Turkmenistan’s energy, development and transportation sectors.

Pointing to the opening of Iran-Turkmenistan-Kazakhstan railway in the near future, Rouhani said Iran would be a safe and secure route for the transit of goods through the Central Asia and the Persian Gulf region.

Rouhani also called for the development of cultural, scientific and tourism ties between the two neighboring countries.

Berdimuhamedow, for his part, highlighted Iran’s key status on regional and international scenes and welcomed further enhancement of ties between Tehran and Ashgabat to the highest level.

 

Iran-India Strategic Partnership

 

In a meeting with Indian Foreign Affairs Minister Sushma Swaraj, Rouhani said many countries are willing to invest in Iran, adding that Iran considers India as a strategic and powerful partner.

“For investment in its projects particularly at Chabahar Port, Iran prioritizes India,” Rouhani said.

Swaraj said Iran has been longtime and reliable supplier of energy to India.

He said that India is studying investment in Iran’s southern ports particularly Chabahar Port.

Rouhani also invited Indian Prime Minister Narendra Modi to travel to Iran for talks on the expansion of bilateral ties.

 We hope to see a new chapter in relations between the two countries,” Rouhani said.

Modi has indicated that he is keen to visit Tehran and Sushma told Rouhani India hoped to schedule the trip in 2015.

India has offered to establish direct shipping route to Iran’s southeastern Chabahar Port in a bid to cut the costs of the transit of commodities between the two countries.

The capital investment initially envisaged for the construction of a container terminal in Chabahar stands at $147 million.

Srivastava described Chabahar as a strategic port facilitating access to Central Asian states.

India’s state-run Jawaharlal Nehru Port Trust sent the expert team to Iran in December 2013 to accelerate work on Chabahar Port with a view to facilitating New Delhi's access to Afghanistan and Central Asia.

The team has since been conducting technical and commercial assessment.

Iran’s Chabahar Port, located 72 kilometers (44 miles) west of Pakistan’s Gwadar port, holds immense strategic and economic significance for India.

The port is already connected to the city of Zaranj in Afghanistan’s southwestern province of Nimruz and can serve as India’s entry point to Afghanistan, Central Asia and beyond.

 

Second Presence at SCO Summit

Entering World Markets through Energy Diplomacy

 

The Shanghai Cooperation Organization (SCO) is a Eurasian political, economic and military organization which was founded in 2001 in Shanghai by the leaders of China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan. Except for Uzbekistan, the other countries had been members of the Shanghai Five, founded in 1996; after the inclusion of Uzbekistan in 2001, the members renamed the organization.

The Shanghai Five grouping was originally created on 26 April 1996 with the signing of the Treaty on Deepening Military Trust in Border Regions in Shanghai by the heads of states of Kazakhstan, the People's Republic of China, Kyrgyzstan, Russia and Tajikistan. On 24April 1997, the same countries signed the Treaty on Reduction of Military Forces in Border Regions in a meeting in Moscow.

Cooperation in the security, economic and cultural sectors and serving as a counterweight to NATO are among the main tasks of SCO. In 2004, Mongolia was granted observer status at SCO and one year later, Iran, Pakistan and India become observer states. SCO member states make up 25 percent of the world population.

Some analysts maintain that the SCO will in the near future envisage accepting Iran as a member state given the country’s growing strength in the region and its strategic position in connecting Central Asia and the Persian Gulf.

Due to the significance of this organization and its decisions, Iranian President Hassan Rouhani led a high-ranking political and economic delegation to the SCO summit.

Rouhani embarked on a five-day trip which took him first to Kazakhstan and then to Tajikistan where the SCO summit was held on September 12. During his trip, Rouhani met with the leaders of SCO member states.

It was the second time that President Rouhani attended the SCO summit since he took office in August 2013.

Private meeting between Rouhani and his Tajik counterpart Emomalii Rahmon, meeting with Tajik prime minister and spokesman of parliament, bilateral talks between Iranian and Tajik officials, signature of documents for cooperation, meeting with the SCO secretary general, delivering a speech to professors and students and meeting with Iranians living in Tajikistan were among the programs of Rouhani’s visit.

Rouhani also inaugurated the second generating unit of an Iranian-financed hydroelectric power plant in Tajikistan.

Rouhani and Rahmon led the inauguration of the second turbine at Sangtuda-2 hydropower plant via videoconference in the Tajik capital city of Dushanbe on September 10.

Tehran believes that countering international sanctions should become a principle of the SCO and its member states.

 

Four-Nation Transit Corridor

 

President Rouhani told the SCO summit that energy, water and access to world markets contribute to regional stability and development.

He said Iran-Turkmenistan-Kazakhstan railroad is expected to become operational by December.

The Iranian president added that construction of Iran-Turkmenistan-Uzbekistan-Oman transit corridor is also starting in order to facilitate connections between Central Asia and the Persian Gulf through Iran.

Rouhani said the four-nation corridor will provide the SCO with an advanced connection route stretching from the Persian Gulf to the Indian Ocean and then to the China Sea.

“Enjoying huge energy reserves and a strategic position, the Islamic Republic of Iran has managed to play a fundamental role in regional convergence,” he said. “It is clear that without Iran’s role and contribution, designing energy transit corridors in the region will have no economic justification.”

He also referred to the issue of terrorism and extremism, saying: “In last year’s summit, I talked about extremism, terrorism and international organized crimes and I described them not only as a major challenge to SCO security, but a global challenge. I brought up the issue at the UN General Assembly too and I feel happy that this anxiety won international consensus and resulted in the adoption of a resolution about fight on violence and terrorism.”

“Now, one year has passed and the world is realizing more and more the depth of this warning and the hazards of this ominous phenomenon,” said Rouhani.

The Iranian president said most SCO member states are facing the “threat of extremism and terrorism.”

“Therefore, organized planning, bilateral or multilateral cooperation, political interaction and intelligence sharing and dealing with cultural and economic poverty and the support of the [SCO] member states for these measures are the only way to confront this crisis and go through growing problems,” he said.

Rouhani said the current spiraling crisis, created due to the activity of extremist and terrorist groups, in the region could be contained under the aegis of regional and international joint actions or it will spill over to outside the region.

“The international community needs interaction, friendship, peaceful coexistence of nations and ethnicities under the aegis of moderation, and establishment of peace needs confronting violence and negating extremism,” said the president.

Rouhani said the ongoing political conditions in Afghanistan have worried the SCO member states, expressing hope that the organization will help Afghan people and political groups see stability and security.

“While security is the most important cause of concern for the world countries, including SCO members, regional stability and development and national welfare are other important issues which need to be taken into account,” he said, adding that the SCO has to work out effective mechanisms for regional and international affairs.

“Undoubtedly, establishment of stability and security in the region requires economic, social, cultural and political development along with intelligence and security measures. Therefore, that would be a long-term solution for eradicating terrorism,” Rouhani said.

 

Rouhani-Putin Meeting

 

Rouhani and Russian President Vladimir Putin met on the sidelines of the SCO summit and called for the expansion of relations between the two countries in all areas of interest.

Rouhani said Iran and Russia are maintaining strategic relations, noting that the grounds are prepared for the two countries to broaden cooperation in economic, trade, scientific and technological sectors.

Putin also said that Tehran-Moscow relations are growing and noted that new agreements are expected to be signed between the two countries.

 

Meeting With Chinese, Afghan Presidents

 

Rouhani held separate meetings with Chinese President Xi Jinping and Afghan President Hamid Karzai.

In the meeting with Xi, Rouhani called for the implementation of agreements Tehran and Beijing signed in the past. Rouhani also highlighted strong ties between Iran and China.

Xi referred to Iran’s important position in the region and the world and said China looks for strategic relations with Iran. The Chinese president also said he would travel to Iran next year.

In his meeting with Karzai, Rouhani underscored the significance of stability and peace in Afghanistan and said: “The realization of Afghan people’s will is the most important factor in the development of this country and Iran is ready for any kind of assistance in this regard.”

Rouhani and Karzai discussed the future of Afghanistan and the role of regional countries and trans-regional powers.

 

Tehran-Ashgabat Ties

 

In a meeting with his Turkmen counterpart Gurbanguly Berdimuhamedow in Dushanbe, Rouhani said the Islamic Republic is ready to offer help to Turkmenistan to develop its infrastructure.

Iran is also ready to provide the Central Asian country with required commodities and products, Rouhani said.

“Iran and Turkmenistan are two neighboring and brotherly nations with common roots, and it is necessary that they utilize their untapped potential in bilateral ties,” Rouhani said.

He called for the presence of Iranian entrepreneurs and investors in Turkmenistan’s energy, development and transportation sectors.

Pointing to the opening of Iran-Turkmenistan-Kazakhstan railway in the near future, Rouhani said Iran would be a safe and secure route for the transit of goods through the Central Asia and the Persian Gulf region.

Rouhani also called for the development of cultural, scientific and tourism ties between the two neighboring countries.

Berdimuhamedow, for his part, highlighted Iran’s key status on regional and international scenes and welcomed further enhancement of ties between Tehran and Ashgabat to the highest level.

 

Iran-India Strategic Partnership

 

In a meeting with Indian Foreign Affairs Minister Sushma Swaraj, Rouhani said many countries are willing to invest in Iran, adding that Iran considers India as a strategic and powerful partner.

“For investment in its projects particularly at Chabahar Port, Iran prioritizes India,” Rouhani said.

Swaraj said Iran has been longtime and reliable supplier of energy to India.

He said that India is studying investment in Iran’s southern ports particularly Chabahar Port.

Rouhani also invited Indian Prime Minister Narendra Modi to travel to Iran for talks on the expansion of bilateral ties.

 We hope to see a new chapter in relations between the two countries,” Rouhani said.

Modi has indicated that he is keen to visit Tehran and Sushma told Rouhani India hoped to schedule the trip in 2015.

India has offered to establish direct shipping route to Iran’s southeastern Chabahar Port in a bid to cut the costs of the transit of commodities between the two countries.

The capital investment initially envisaged for the construction of a container terminal in Chabahar stands at $147 million.

Srivastava described Chabahar as a strategic port facilitating access to Central Asian states.

India’s state-run Jawaharlal Nehru Port Trust sent the expert team to Iran in December 2013 to accelerate work on Chabahar Port with a view to facilitating New Delhi's access to Afghanistan and Central Asia.

The team has since been conducting technical and commercial assessment.

Iran’s Chabahar Port, located 72 kilometers (44 miles) west of Pakistan’s Gwadar port, holds immense strategic and economic significance for India.

The port is already connected to the city of Zaranj in Afghanistan’s southwestern province of Nimruz and can serve as India’s entry point to Afghanistan, Central Asia and beyond.

 

New Chapter in Iran-Russia Ties

 

With the signature of a $70 billion deal between Iranian Petroleum Minister Bijan Namdar Zangeneh and Russian Energy Minister Alexander Novak during the 11^th meeting of Iran-Russia Joint Business Council in Tehran, Tehran and Moscow took the first step for broadening economic cooperation following one year of negotiations on joint cooperation.

Earlier, economic experts had noted that Iran and Russia, both rich in oil and gas, can develop extensive trade and economic cooperation in favor of economic development in both countries.

Two months before, Zangeneh led an economic delegation to Russia to clear the way for the development of cooperation between Tehran and Moscow. The talks ended in the signature of four MOUs between Iran and Russia. The memorandums cal for cooperation between Iran’s Ministry of Petroleum, Ministry of Industry, Mine and Trade, petrochemical companies and Iran's Mines and Mining Industries Development and Renovation Organization (IMIDRO) and Russian economic and trade sectors. Iran International Petrochemical Company (IIPC) and Russian Gas Stroll signed an agreement for the construction of a fertilizer plant while IMIDRO and a Russian company agreed on an exploration project.  

 

Iran-Russia Trade to Decuple

 

After the signature of the agreements, Zangeneh said the administration of President Hassan Rouhani is seeking strategic ties with Russia.

“Iran’s high-quality products and services can meet Russia’s growing demand,” he said.

Zangeneh expressed hope that Iran-Russia trade, which totaled $1.5 billion last year, would be multiplied by ten. He noted that the current volume of transactions between Tehran and Moscow is not satisfactory.

“Given the agreements reached between the two countries over the past several months, we hope that a big jump would take place in Iran-Russia economic relations,” said the Iranian minister.

Zangeneh said policies adopted by Iran’s President Rouhani and Russia’s President Vladimir Putin have created hopes of a big opportunity for the expansion of relations.

He told a group of Iranian businessmen that Russia is a country with a big market and rapid economic growth.

“Both in the commodities and services sectors, high-quality and international standards-compliant Iranian products can meet Russia’s growing demand for commodities,” said the minister.

Zangeneh underscored the need for facilitating financial, banking and consular relations between the two countries, saying: “In a memorandum signed between the two sides, the necessary facilities for the improvement of relations have been envisaged and it is expected that the private sector in both sides would be able to gain maximum benefit from this opportunity as both countries are making efforts for preparing the infrastructure for development of ties.”

Zangeneh referred to Russia’s big potentials in the oil, gas, electricity and technology industry, saying Iran and Russia can cooperate in “executing commodities and services imports and exports.”

He said central banks in Iran and Russia have done their utmost to develop an appropriate model for the exchange of commodities between the two countries.

“In talks with Russia’s energy minister, it was agreed that Iran-Russia banking transactions would be conducted in the national currency of both countries,” the minister said.

Zangeneh said six committees have been established to follow up on issues pertaining to Iran-Russia cooperation.

“These committees have held talks in the energy, industry, trade, agriculture, tourism, banking, technology and visa issuance affairs,” he said.

“In order to facilitate money and commodity transfer, mechanisms have been worked out so that the transactions between the two countries would be done in the national currency of both countries,” said Zangeneh.

The minister said the committees will also follow up on customs affairs, standards, insurance and visa.

Zangeneh said the final document of the 11^th meeting of Iran-Russia Joint Business Council envisages a significant role for chambers of commerce and private entities in both countries to play.

 

Tehran-Moscow Ties Deep-Seated

 

Novak said the sanctions, imposed by the United States and the European Union, against Iran and Russia has not brought Iran and Russia closer together, noting that “Iran-Russia relations are deep-rooted.”

“The grounds for Iran-Russia cooperation were prepared in the previous meeting of Iran-Russia Business Council (held in Moscow) and at that time, there was no talk of the sanctions,” said the Russian minister.

Noting that both countries are willing to enhance trade and economic cooperation level, Novak said Russia is expected to contribute to the construction of a new railway which is estimated to cost 70 billion Euros.

He said energy, technical products and machinery are other areas of cooperation between Tehran and Moscow.

Novak gave a positive assessment of the 11^th meeting of the Business Council, saying: “This event is a milestone in Russian-Iranian commercial relations, which will facilitate trade between the two countries.”

He said that Russia is ready to launch Tupolev Tu-204SM planes production line in Iran.

Novak said Iran’s hydrocarbon deposits are attractive for Russia, expressing regret that international sanctions have limited cooperation between the two countries.

The Russian delegates in Tehran voiced hope that more ties with Iran could pave the way for neutralization of the US-imposed sanctions on Moscow.

“The latest sanctions imposed by the US and EU disrupted the process of fruit import to Russia from European countries like Poland, said Victor Melinkov, the business council chairman, adding that the situation provides an opportunity for Russia to “compensate for this problem by importing fruits from Iran.”

Tensions between Russia and the West heightened after Ukraine's Black Sea peninsula of Crimea joined the Russian Federation following a referendum in March.

 

Thermal Plants

 

Russia’s engineering company Technopromexport has agreed to build thermal power plants in Iran.

The agreement for that purpose was signed in Tehran between Iran’s Deputy Energy Minister Houshang Falahatian and Managing Director of Technopromexport Anatoly Tikhonov.

“Our objective is to build power plants of the highest quality to produce minimum environment pollution while providing the highest production,” said Falahatian.

The head of TAVANIR power distribution company, Homayoun Haeri, said the agreement came following a meeting between Iranian Energy Minister Hamid Chitchian and Russian Energy Minister Alexander Novak in Tehran on Tuesday.

He said that the new power plants are to be built in the cities of Sahand (northwest), Bandar Abbas (south), Tabriz (northwest) and Tabas (south).

He added that the new power plants will add some 3,500 megawatts of electricity to the country’s generation capacity.

Haeri said Russia has also agreed to develop two Iranian power plants.

Deputy Director of the Asia and Africa Department of the Russian Economic Development Ministry Nailya Chernikova said energy is instrumental in relations between Iran and Russia.

She said the presence of a large number of energy officials from Russia in Tehran indicates the significance of energy for both countries.

Chernikova said the 11^th meeting is different from the previous ones because Iranian and Russian presidents have given new impetus to the two countries to boost relations.

 

Energy Cooperation

 

Oil and gas-rich Russia is an important country in terms of energy supply in the world. Russia’s 2013 proven oil reserves were estimated at 93 billion barrels, i.e. 5.5% of the world’s total, while its proven natural gas reserves amounted to 31.3 tcm, or 16.8% of the world’s total.

Russia produced 10.788 mb of oil in 2013 when its domestic consumption reached 3.313 mb/d and it exported 7.5 mb/d of oil and petroleum products.

In the natural gas sector, Russia’s production reached 604.8 bcm, or 17.9% of the world’s total, in 2013. Given its annual domestic consumption of 413.5 bcm, Russia exported 191.3 bcm of natural gas, mainly to Europe, in 2013.

Iran enjoys similar advantages in crude oil and natural gas production and exports. Therefore, the two countries can cooperate in the oil and gas sectors.

 

 

 

Upstream Cooperation

 

Most oil fields in west Siberia have already passed the first half of their life and Russia is using different methods and techniques to maintain the level of its production. Many hydrocarbon fields in Iran are in similar conditions; therefore Tehran can benefit from Moscow’s experience in order to prevent production fall-off in mature fields and enhance recovery from them.

Moreover, Russia has developed technology for building mini-LNG plants to produce much-needed liquefied natural gas.

Within the framework of Gas Exporting Countries Forum (GECF) which was established in 2008 for further coordination between gas exporting countries, Iran can get finance from Russian companies for its gas export projects.

 

Europe Gas Market

 

Europe’s gas market is among the developed markets whose future is stable although it may offer lower demand than emerging markets today.

Russia is currently the main gas supplier to Europe’s market. Iran, which sits atop huge gas reserves and has major recovery enhancement projects under way, will be able to become a major supplier of gas to Europe.

Europe is also seeking to diversify its gas sources away from Russia. To that effect, Iran and the Middle East are a good option.

Now, Iran and Russia are facing two options: They can either rival each other in the market in the interest of the European Union or focus on cooperation in the interest of both countries.

It is believed that Iran and Russia are smart enough to choose the second option.

New Chapter in Iran-Russia Ties

 

With the signature of a $70 billion deal between Iranian Petroleum Minister Bijan Namdar Zangeneh and Russian Energy Minister Alexander Novak during the 11^th meeting of Iran-Russia Joint Business Council in Tehran, Tehran and Moscow took the first step for broadening economic cooperation following one year of negotiations on joint cooperation.

Earlier, economic experts had noted that Iran and Russia, both rich in oil and gas, can develop extensive trade and economic cooperation in favor of economic development in both countries.

Two months before, Zangeneh led an economic delegation to Russia to clear the way for the development of cooperation between Tehran and Moscow. The talks ended in the signature of four MOUs between Iran and Russia. The memorandums cal for cooperation between Iran’s Ministry of Petroleum, Ministry of Industry, Mine and Trade, petrochemical companies and Iran's Mines and Mining Industries Development and Renovation Organization (IMIDRO) and Russian economic and trade sectors. Iran International Petrochemical Company (IIPC) and Russian Gas Stroll signed an agreement for the construction of a fertilizer plant while IMIDRO and a Russian company agreed on an exploration project.  

 

Iran-Russia Trade to Decuple

 

After the signature of the agreements, Zangeneh said the administration of President Hassan Rouhani is seeking strategic ties with Russia.

“Iran’s high-quality products and services can meet Russia’s growing demand,” he said.

Zangeneh expressed hope that Iran-Russia trade, which totaled $1.5 billion last year, would be multiplied by ten. He noted that the current volume of transactions between Tehran and Moscow is not satisfactory.

“Given the agreements reached between the two countries over the past several months, we hope that a big jump would take place in Iran-Russia economic relations,” said the Iranian minister.

Zangeneh said policies adopted by Iran’s President Rouhani and Russia’s President Vladimir Putin have created hopes of a big opportunity for the expansion of relations.

He told a group of Iranian businessmen that Russia is a country with a big market and rapid economic growth.

“Both in the commodities and services sectors, high-quality and international standards-compliant Iranian products can meet Russia’s growing demand for commodities,” said the minister.

Zangeneh underscored the need for facilitating financial, banking and consular relations between the two countries, saying: “In a memorandum signed between the two sides, the necessary facilities for the improvement of relations have been envisaged and it is expected that the private sector in both sides would be able to gain maximum benefit from this opportunity as both countries are making efforts for preparing the infrastructure for development of ties.”

Zangeneh referred to Russia’s big potentials in the oil, gas, electricity and technology industry, saying Iran and Russia can cooperate in “executing commodities and services imports and exports.”

He said central banks in Iran and Russia have done their utmost to develop an appropriate model for the exchange of commodities between the two countries.

“In talks with Russia’s energy minister, it was agreed that Iran-Russia banking transactions would be conducted in the national currency of both countries,” the minister said.

Zangeneh said six committees have been established to follow up on issues pertaining to Iran-Russia cooperation.

“These committees have held talks in the energy, industry, trade, agriculture, tourism, banking, technology and visa issuance affairs,” he said.

“In order to facilitate money and commodity transfer, mechanisms have been worked out so that the transactions between the two countries would be done in the national currency of both countries,” said Zangeneh.

The minister said the committees will also follow up on customs affairs, standards, insurance and visa.

Zangeneh said the final document of the 11^th meeting of Iran-Russia Joint Business Council envisages a significant role for chambers of commerce and private entities in both countries to play.

 

Tehran-Moscow Ties Deep-Seated

 

Novak said the sanctions, imposed by the United States and the European Union, against Iran and Russia has not brought Iran and Russia closer together, noting that “Iran-Russia relations are deep-rooted.”

“The grounds for Iran-Russia cooperation were prepared in the previous meeting of Iran-Russia Business Council (held in Moscow) and at that time, there was no talk of the sanctions,” said the Russian minister.

Noting that both countries are willing to enhance trade and economic cooperation level, Novak said Russia is expected to contribute to the construction of a new railway which is estimated to cost 70 billion Euros.

He said energy, technical products and machinery are other areas of cooperation between Tehran and Moscow.

Novak gave a positive assessment of the 11^th meeting of the Business Council, saying: “This event is a milestone in Russian-Iranian commercial relations, which will facilitate trade between the two countries.”

He said that Russia is ready to launch Tupolev Tu-204SM planes production line in Iran.

Novak said Iran’s hydrocarbon deposits are attractive for Russia, expressing regret that international sanctions have limited cooperation between the two countries.

The Russian delegates in Tehran voiced hope that more ties with Iran could pave the way for neutralization of the US-imposed sanctions on Moscow.

“The latest sanctions imposed by the US and EU disrupted the process of fruit import to Russia from European countries like Poland, said Victor Melinkov, the business council chairman, adding that the situation provides an opportunity for Russia to “compensate for this problem by importing fruits from Iran.”

Tensions between Russia and the West heightened after Ukraine's Black Sea peninsula of Crimea joined the Russian Federation following a referendum in March.

 

Thermal Plants

 

Russia’s engineering company Technopromexport has agreed to build thermal power plants in Iran.

The agreement for that purpose was signed in Tehran between Iran’s Deputy Energy Minister Houshang Falahatian and Managing Director of Technopromexport Anatoly Tikhonov.

“Our objective is to build power plants of the highest quality to produce minimum environment pollution while providing the highest production,” said Falahatian.

The head of TAVANIR power distribution company, Homayoun Haeri, said the agreement came following a meeting between Iranian Energy Minister Hamid Chitchian and Russian Energy Minister Alexander Novak in Tehran on Tuesday.

He said that the new power plants are to be built in the cities of Sahand (northwest), Bandar Abbas (south), Tabriz (northwest) and Tabas (south).

He added that the new power plants will add some 3,500 megawatts of electricity to the country’s generation capacity.

Haeri said Russia has also agreed to develop two Iranian power plants.

Deputy Director of the Asia and Africa Department of the Russian Economic Development Ministry Nailya Chernikova said energy is instrumental in relations between Iran and Russia.

She said the presence of a large number of energy officials from Russia in Tehran indicates the significance of energy for both countries.

Chernikova said the 11^th meeting is different from the previous ones because Iranian and Russian presidents have given new impetus to the two countries to boost relations.

 

Energy Cooperation

 

Oil and gas-rich Russia is an important country in terms of energy supply in the world. Russia’s 2013 proven oil reserves were estimated at 93 billion barrels, i.e. 5.5% of the world’s total, while its proven natural gas reserves amounted to 31.3 tcm, or 16.8% of the world’s total.

Russia produced 10.788 mb of oil in 2013 when its domestic consumption reached 3.313 mb/d and it exported 7.5 mb/d of oil and petroleum products.

In the natural gas sector, Russia’s production reached 604.8 bcm, or 17.9% of the world’s total, in 2013. Given its annual domestic consumption of 413.5 bcm, Russia exported 191.3 bcm of natural gas, mainly to Europe, in 2013.

Iran enjoys similar advantages in crude oil and natural gas production and exports. Therefore, the two countries can cooperate in the oil and gas sectors.

 

 

 

Upstream Cooperation

 

Most oil fields in west Siberia have already passed the first half of their life and Russia is using different methods and techniques to maintain the level of its production. Many hydrocarbon fields in Iran are in similar conditions; therefore Tehran can benefit from Moscow’s experience in order to prevent production fall-off in mature fields and enhance recovery from them.

Moreover, Russia has developed technology for building mini-LNG plants to produce much-needed liquefied natural gas.

Within the framework of Gas Exporting Countries Forum (GECF) which was established in 2008 for further coordination between gas exporting countries, Iran can get finance from Russian companies for its gas export projects.

 

Europe Gas Market

 

Europe’s gas market is among the developed markets whose future is stable although it may offer lower demand than emerging markets today.

Russia is currently the main gas supplier to Europe’s market. Iran, which sits atop huge gas reserves and has major recovery enhancement projects under way, will be able to become a major supplier of gas to Europe.

Europe is also seeking to diversify its gas sources away from Russia. To that effect, Iran and the Middle East are a good option.

Now, Iran and Russia are facing two options: They can either rival each other in the market in the interest of the European Union or focus on cooperation in the interest of both countries.

It is believed that Iran and Russia are smart enough to choose the second option.

Mideast Largest Underground Gas Storage Facility Launched

 

Shourijeh underground gas storage facility, which is the largest in the Middle East, was inaugurated by Iran's Petroleum Minister Bijan Namdar Zangeneh on September 7. Located in the northeastern city of Sarakhs, the facility has the capacity to store 4.8 bcm of gas.

Gas injection into Shourijeh storage facility is aimed at keeping enough gas for supply to northern and northeastern provinces in the winter.

The facility will be fed with 10 mcm/d of gas for the delivery of 20 mcm/d to gas trunklines in the winter.

The operation of Shourijeh gas storage facility promotes Iran to the fifth rank in terms of natural gas storage in the world.

 

70% Share in Energy Mix

 

Addressing the inauguration ceremony, Zangeneh said that 600 mcm/d gas consumption in Iran is too much, adding that gas has a 70% share in Iran’s energy mix.

“Such high need for gas requires us to build more transmission lines and gas booster pressure stations or build on-the-surface and underground storage facilities,” the minister said.

Zangeneh said Sarajeh and Shourijeh underground gas storage facilities are of high value for Iran’s gas distribution network.

He said the upstream and downstream sections of Shourijeh facility have cost 400 million dollars, adding that the facility will have a good rate of return on investment.

The minister said Iran should raise its gas storage capacity to more than 100 mcm in order to accelerate gas distribution across the country.

Zangeneh said development of fields shared by Iran and Turkmenistan is a priority for Iran’s Petroleum Ministry, adding that development activities are expected to be assigned to Iran’s Central Oil Fields Company.

“The Iranian Petroleum Ministry’s priority is to develop joint gas fields because it would allow gas distribution in north and northeast of the country and nothing will be spent for gas transmission from south to north of the country,” said Zangeneh.

He also said a propylene plant is to be constructed in Sarakhs special economic zone which borders Turkmenistan.

 

Gas Storage to Hit 1.8 bcm

 

So far, 1.5 bcm of gas has been stored in Shourijeh and Sarajeh underground storage facilities and this volume is to climb to 1.8 bcm in winter, the managing director of Iran Gas Storage Company said.

Masoud Samivand said the two facilities would allow delivery of 20 mcm/d of gas.

“Shourijeh storage facility is equipped with two 10-mcm dehydration units. One unit has already become operational and the second one will come on-stream if production rises,” he said.

Samivand said Shourijeh is currently holding 400 mcm, while Sarajeh has stored 1.1 bcm of gas.

“Despite sanctions, foreign exchange rate fluctuations and restrictions in the transfer of equipment, the Shourijeh storage project came online on schedule, in 34 months,” he said, adding that the project cost IRR 2.87 billion.

Samivand said the Shourijeh gas storage project was ready to come online last year, but winter was approaching and no gas was stored in.

 

Readiness for Joint Fields

 

Salbali Karimi, managing director of Iranian Central Oil Fields Company (ICOFC), said the company is ready to develop other fields.

“If we are given the permission to develop Tous and Afshar fields we will become influential in sustainable feedstock and fuel supply,” he said.

Karimi said ICOFC’s production has increased more than expected, adding: “93 bcm of gas, 25 mcm of gas condensate and 30 million barrels of crude oil have been produced in the fields run by ICOFC and this production has mainly come from joint fields and the fields located in the west and Zagros region.”

Karimi referred to untapped fields in central Iran and said ICOFC fulfills its obligations with regards to fuel supply in winter.

 

7 mcm/d Gas Injection

 

Managing director of Shahid Hasheminejad Gas Refining Company Nasser Eslami told the inauguration ceremony that 7 mcm/d of gas is being injected into Shourijeh facility by two turbocompressors.

He said 9 mcm/d of gas could be withdrawn from this facility in winter, adding that the gas withdrawal capacity from Shourijeh will reach 20 mcm/d next year.

Eslami said Sarajeh’s capacity is 3.6 bcm and Shourijeh’s is 4.8 bcm.

He said capacity of Sarajeh dehydration units are10 mcm /d, while those of Shourijeh are 20 mcm/d.

Eslami said electricity is supplied to Sarajeh from national grid and Shourijeh receives the required gas from power plants and national power grid.

Under Iran’s Fifth Five-Year Economic Development Plan (2010-2015), 14 percent of the country’s gas production has to be provided by storage facilities.

 

Iran Boosts Petchem Exports to East Europe

 

Iran has increased its petrochemical exports to East European countries as sanctions have eased on the Islamic Republic, a top businessman has said.

Hassan Khosrowjerdi, head of the Iranian Oil, Gas and Petrochemical Products Exporters’ Association, said the obstacles to petrochemical industry have been removed following increased interaction between Iran and European countries.

He said Romania is set to boost its petrochemical imports from Iran, adding: “Recently, petrochemical exports to West Europe have started and Italy, Spain and Greece have moved to import these products from Iran.”

Ali-Mohammad Basaqzadeh, director of production at National Petrochemical Company, said Iran used to export its products indirectly and through mediators to Europe. “But with the removal of the sanctions, exports to Europe will be done more easily.”

Ebrahim Bahadorani, secretary general of Tehran Chamber of Commerce, said petrochemical products exports to Romania are set to increase in the near future.

“In the past, steel and industrial parts were imported to Iran from Romania and in return, petrochemicals and foodstuff were exported to that country. We are planning to increase the export of these products,” he said.

 

Gas Flaring Avoided in Bahregan

 

The operation of a new gas pipeline stretching from Bahregan oil region to Abouzar Platform has prevented the flaring of 30 mcf of gas, a senior official said.

Saeed Hafezi, managing director of Iranian Offshore Oil Company (IOOC), said the pipeline startup was an achievement of IOOC last year.

He said that IOOC managed to transfer gas from Bahregan to Abouzar Platform to feed a petrochemical plant.

Hafezi said IOOC has strategic plans under way to prevent associated gas from being flared off.

He said that the associated petroleum gases will be gathered and transmitted through a subsea pipeline to onshore facilities.

“Since Abouzar Platform has become a major route connecting Soroush, Bahregansar and Norouz regions, all gases are gathered here with the help of compressors,” said Hafezi.

 

Iran Set to End Gasoline Imports

 

The start-up of two capacity enhancement projects in two refineries will eliminate Iran’s need for importing gasoline, a senior official said.

Managing Director of National Iranian Oil Refining and Distribution Company (NIORDC) Abbas Kazemi said the completion of capacity enhancement projects in Abadan and Bandar Abbas refineries will add 4 ml/d to the country’s production.

He said Iran has been importing 4.5 ml/d of gasoline on average since the start of the calendar year in March.

“We hope that with the 4-ml increase in Abadan and Bandar Abbas refineries’ gasoline production we will reach self-sufficiency in gasoline production before the startup of Persian Gulf Star Refinery,” he said.

Kazemi said production in Abadan refinery will soar from 10.1 ml/d to 12.5 ml/d in autumn, adding that Bandar Abbas refinery will contribute 2 ml/d to the country’s gasoline production.

South Africa Ready to Resume Iran Oil Imports

 

South Africa wants to resume oil imports from Iran, once its biggest supplier, and hopes to resolve "sanction issues" that have blocked purchases within the next three months, its deputy foreign affairs minister said.

South Africa bought around 68,000 barrels of oil per day (b/d) from Iran in May 2012, a month before it halted crude purchases, as Western countries pressured Tehran over its nuclear program. That was well down from peak purchases in 2011.

Africa's second biggest crude consumer imports around 380,000 bpd, with Saudi Arabia overtaking Iran as its biggest supplier in 2012 when Western sanctions intensified. Nigeria, Angola and Ghana also sell oil to South Africa.

"Definitely we have an agreement, of course with the sanction issue it slowed down, but that is something we are doing," Nomaindiya Mfeketo said in response to a Reuters question about whether South Africa would resume Iranian oil imports.

"We deliberated on that (timing) in our meetings. We're looking at something under three months," she added.

The United States granted South Africa an exemption from financial sanctions after it made cuts in Iranian imports, but European Union sanctions preventing insurers from underwriting Iranian shipments have presented other problems for Pretoria.

 

10 Petchem Projects Ready for Operation

 

Director of projects at National Petrochemical Company (NPC) Marzieh Shah-Daei has said that ten petrochemical projects are ready to come on-stream.

She said the projects – Takht-e Jamshid PVC, second phase of Kavian Petchem Plant, second phase of Karoun Petchem Plant, West Ethylene Pipeline, Lorestan Petchem Plant, Kurdestan Petchem Plant, Ilam Petchem Plant, Mahabad Petchem Plant and Hegmataneh Petchem Plant – are more than 60% complete and they are expected to come online this year or next year.

Shah-Daei said NPC has also 67 incomplete projects with a production capacity of 60 million tons a year, adding that they need $40 billion in investment.

She said Iran’s Petroleum Ministry has fully supported the petrochemical industry, adding: “In coordination with Iran’s Petroleum Ministry, permissions are issued for feedstock supply and petrochemicals export by the NPC.”

 

South Pars Gas Condensate Exports Rises

 

Gas condensate exports from South Pars gas field reached $4.34 billion during the first half of the current calendar year which started on March 21.

The condensate sales were up 52 percent from a year ago, customs director of Pars Special Economic Energy Zone said.

Khodadad Rahimi said the exports showed 8 percent increase in terms of weight compared with the same period last year.

The destination of exports included China, Japan, the United Arab Emirates, India, Turkey, Iraq, Taiwan, Thailand, Malaysia, Vietnam, Afghanistan, Pakistan, Armenia, Russia, Mozambique, Egypt, Syria, Turkmenistan, Tajikistan, Ukraine, Qatar, Tanzania, the Philippines, Ghana, Kenya, Azerbaijan, Georgia, South Korea and Mexico.

Rahimi said the condensates made up 54 percent of revenues from total non-oil exports from the energy zone.

The PSEEZ was established in 1998 for the utilization of South ‎Pars oil and gas resources and encouraging commercial activities in the field of oil, gas and ‎petrochemical industries.‎

 

NIOC Wooing Foreign Investment for 40 H/C Blocks

 

Iran’s state-run oil company is in talks with 15 European and 3 Asian companies to explore hydrocarbon in 40 blocks in Iran, a senior official said.

Hormuz Qalavand, director of exploration at National Iranian Oil Company (NIOC), said: “NIOC’s cooperation with a European university and company in Zagros block is being finalized.”

He said 76 blocks have been explored in the past 12 years, 11 of which have been decided upon.

Qalavand said the new blocks will be awarded under Iran Petroleum Contract (IPC) which is Iran’s new model of oil contracts.

He said 1.04 billion dollars has been invested in exploration over the past 12 years, noting that three blocks were abandoned half-way due to the imposition of sanctions against the Islamic Republic.

 

Iran Exporting Propane, Butane to Africa

 

Deputy Head of Siri NGL Refinery has said Iran’s first propane and second butane shipments are being exported to Africa.

Mohammad Reza Safari said Siri NGL Refinery will export propane and butane shipments to an African country.

He further said that the refinery has capacity to produce 140 million cubic feet gas on a daily basis.

He added that Siri NGL Refinery produces naphtha, pentane, butane and propane and the complex has exported several shipments to foreign countries so far.

Safari said that this gas export earns foreign currency for the country in return.

Siri Island is located 72 kilometers off Iranian southern shores, 40 kilometers west of Abu Musa Island.

After oil exploration in 1980 the Sufiran Oil Company started its activity there and oil extraction has been on process since then.

 

Tehran, Baku to Cooperate in Gas Storage

 

Iran and Azerbaijan have exchanged views on cooperation in renewable energies, exchange of gas as well as gas storage together.

The discussions were held between Azeri Minister of Economy and Industry Shahin Mustafayev and Iranian Petroleum Minister Bijan Namdar Zangeneh in Tehran.

They talked about natural gas transit, sharing gas storage facilities in the two countries, as well as scientific and research cooperation in the oil and gas sectors.

 

S. Korea's Iran Oil Imports Double in August

 

South Korea's imports of Iranian crude doubled in August from a year ago but fell 8 percent in the first eight months year-on-year, reflecting moves by the world's fifth-largest crude oil importer to navigate terms of sanctions reliefs.

Preliminary customs data, obtained by Reuters, showed that Seoul bought 567,913 tons of crude oil from Tehran last month, or 134,284 b/d, compared with 558,690 tons a month ago and 272,090 tons a year ago.

The intake of Iranian crude in January-August this year by Asia's fourth-largest economy stood at 4.24 million tons, or 127,944 b/d, down 8 percent from a year ago and 5 percent below the 2013 average at 134,000 b/d, according to the data and Reuters' calculations.

South Korea and other Asian buyers are supposed to hold their crude imports from Iran at end-2013 levels - or between 1 million and 1.1 million bpd - under the terms of Iran’s accord with six world powers.

Only two of South Korea's four refiners - SK Energy and Hyundai Oilbank - import Iranian oil, and imports fluctuate as one of the pair buys the crude only every second month.

Overall, South Korea imported 11.4 million tons of crude last month, or 2.7 million bpd, compared with 9.7 million tons in August last year, the customs data showed. Final data for August crude oil imports will be released by state-run Korea National Oil Corp later this month.

 

Iran Oil Output Up in September

 

The latest update from the Secretariat of the Organization of the Petroleum Exporting Countries (OPEC) shows Iran’s August oil production reached 2,769 mb/d, up 14,700 b/d month-on-month.

The figures provided by the OPEC Secretariat do not include gas condensate production.

Iran’s production averaged 2,765 mb/d during the first quarter of the current year.

According to OPEC, Iraqi and Saudi oil production dropped respectively 63,000 b/d and 55,000 b/d in August from the previous month.

 

IOOC Handles 1/3 of Iran Exports

 

Iranian Offshore Oil Company (IOOC) accounts for one-third of Iran’s oil exports, managing director of National Iranian Oil Company (NIOC) said.

“One-seventh of Iran’s oil production is supplied by IOOC-run regions, while one-third of the country’s oil exports come from these regions,” Rokneddin Javadi said.

He added that the IOOC make a major contribution to Iran’s exports due to the high quality of oil extracted from regions administered by the company.

Javadi said due to the hardship of offshore oil extraction, the IOOC’s activities are very difficult.

He said the IOOC has been a leading company in self-sufficiency and that this company has developed offshore petroleum industry in Iran.

Javadi said IOOC, Khazar Exploration and Production Company (KEPCO) and Pars Oil and Gas Company (POGC) are important in Iran’s offshore industry, calling on them to interact further as the future of Iran’s petroleum industry lies in offshore operations.

Iran’s Ex-deputy Minister to Stay in Touch with Oil Industry

 

Iran’s Deputy Petroleum Minister for International Affairs and Commerce Ali Majedi is leaving Petroleum Ministry to serve as the Islamic Republic’s ambassador to Germany. In his latest interview with "Iran Petroleum", he speaks about Iran’s main gas projects.

 

Q: More than 13 years have passed since the issue of Iran’s gas exports to Pakistan and India came up. India pulled out of the project. Is there any hope for Iran’s gas to be delivered to Pakistan?

A: No gas will go to Pakistan up to the end of 2014 because no pipeline has been constructed in Pakistan’s soil. But Iran has said many times that it is ready to export gas to this country. They have now to build their own section of the pipeline and naturally as long as the pipeline has not been completed in Pakistan’s soil no gas will go to this country. They claim lack of finance due to sanctions, but that is not acceptable. Of course they have already acknowledged during negotiations their interest in receiving gas from Iran; therefore, Iran is waiting for Pakistan’s action. Pakistanis offered solutions to accelerate gas delivery by Iran, but they have not made any assessment of the feasibility of the project.

 

Q: Under the contract, Pakistan should pay $200 million in penalty every month to Iran for delaying the construction of the pipeline, and the deadline for the project is December 31, 2104.

A: When one party or both are not happy with the process of work, the case could be referred to international arbitration; therefore, if the pipeline is not constructed Pakistan is not committed to pay the cash fine. There is no such clause in the contract. Iran’s gas exports to Turkey also went to international arbitration and this project could be dealt with accordingly. International arbitration is not Iran’s priority because Iran prefers that the Pakistan will be able to finance the pipeline and build its own part as stipulated in the contract. More serious talks need to be held with them and the Pakistan should not delay the construction of the relevant pipeline until the removal of sanctions. They should try to remove the obstacles they have already noted and that would be a step ahead. But Iran is waiting to see how Pakistan will act.

 

Q: Will Iran help Pakistan build its own section of the pipeline?

A: Iran cannot help them in financing the pipeline due to the current conditions in that country. Of course, under the previous administration [of Iran], the two governments had signed an agreement which was never executed. Therefore, financing the Pakistani section of this pipeline is up to the Pakistanis, themselves.

 

Q: Iran is facing restrictions with regards to financing its joint oil fields. Why should Iran try to speed up the project while the Pakistan has taken no action?

A: Pakistan says incessantly that they really want to receive Iran’s gas, but if they decide to forego the project the pipeline could be used for other purposes, too. However, a major part of this pipeline – more than 80 percent – has already been built in Iran while Pakistan has not started its work yet as it has done only 5% of the work. There is a big difference between our work and theirs.

 

Q: Construction of the pipeline started in 2008. Iran saw that Pakistan does not make any progress in its pipeline. So why did it continue to build its own section?

A: Iran’s section is 1,250 kilometers and Pakistan’s is 780 kilometers. Iran should have started much sooner. The previous administration should have classified the projects based on their priority.

 

Q:  Has the issue of gas exports to India been filed?

A: The Indians had expressed willingness to receive gas from Iran and the best way would be through Pakistan. But they have changed their mind and they want LNG from Iran.

 

Q: But Iran will have no LNG to offer at least for three years.

A:  The Indians have proposed a subsea pipeline, but nobody has followed up on it seriously.

 

Q: Have there been any negotiations for more gas exports to Turkey?

A: Gas export is a national plan. Increasing gas exports to Turkey and Europe, either in the form of LNG or through pipeline should be viewed as a single case. Due to its strategic position, Iran has alternatives for gas exports. Therefore, there should be flexible program in this regard to meet the demands of both parties with regards to regional and international conditions. Gas production and exports are on the agenda of Petroleum Ministry and the South Pars phases are being developed quickly. Iran will have surplus production which could be exported. There is the possibility of gas storage in the country; therefore, nobody should fear that Iran will have to stockpile its gas. Enhanced gas production capacity will boost Iran’s bargaining power and flexibility in the world.

 

Q: Don’t you think that Iran’s gas is sold at much higher prices than Russia’s and Azerbaijan's to Turkey?

A: Gas price depends on the market and its share of the market. When the gas share is low in the market the price goes up. Therefore, the price depends on the amount, too. When more gas is exported the gas price is modified, like other commodities. Therefore, access to market is important. Moreover, other factors are also important in gas contracts.

 

Q: China is Iran’s top trading partner, but this country has become unreliable due to its bad performance like in the development of Azadegan field. What do you think of the future of Iran-China relations?

A: In terms of structure, economies of the two countries complement each other, but the trade ties between Iran and China may expand. Sinopec did not have a brilliant record in Yadavaran project, but it has been acceptable. But CNPC was behind the schedule and it ignored warnings by the National Iranian Oil Company and the contract for the development of Azadegan with this company was terminated at the order of Petroleum Minister Bijan Namdar Zangeneh.

 

Q: You are appointed as Iran’s ambassador to Germany. How will you keep in touch with oil industry?

A: When I was serving as Iran’s ambassador to Japan, the contract for Azadegan – one of the most important upstream oil projects – was signed and I was in proper contact with petroleum industry. I will make efforts in Germany to convince the Germans to participate in the [development of] oil and gas fields in Iran. Iran’s petroleum industry depends on Germany in some sectors. I have plans in my mind about Iran selling oil to Germany or Iran’s gas exports to Germany.

Energy Management with Renewable Sources

 

 

The tenth international energy forum was held in Tehran on August 26. The motto of the forum was “Efficiency in Resource Management, Excellency in Energy Industry.”

Iranian energy officials and foreign guests exchanged views about management of energy sources, energy and economy as well as energy and environment technology.

The participants in the event included Iran’s Petroleum Minister Bijan Namdar Zangeneh, Minister of Energy Hamid Chitchian, Minister of Industry, Mine and Trade Mohammad-Reza Nematzadeh, Tehran mayor Mohammad-Baqer Qalibaf, energy ministers of Senegal, Russia, Syria and Kyrgyzstan as well as a number of senior managers from Germany, the Netherlands, the US, Hong Kong, Lebanon and Turkey.   

 

Iran’s Clean Fuel Mix

 

Iran’s petroleum minister said Iran has expanded gas distribution network and is installing more compressed natural gas (CNG) stations across the country, noting that Iran’s fuel mix is among the least polluting in the world.

“In order to reach the production capacity matching the amount of our oil and gas reserves, we try to acquire the best technology in the world and win footholds in secure markets through cooperation with international oil, service and engineering companies,” the minister said.

In this way, Zangeneh said, the economic objectives of the country will be realized while Iran will be able to strengthen its position in the world oil markets.

Noting that 70 percent of Iran’s energy is supplied by natural gas, he said: “Currently, 87% of Iran’s population enjoy natural gas distribution network and the extent of gas consumption among urban consumers has reached 98 percent.”

“In the transportation sector, there are more than 2,000 fuel stations in the country. They supply 20 mcm/d of natural gas equivalent to more than three million cars and this figure is unique in the world,” said Zangeneh.

The minister said environmental issues, particularly energy efficiency, are among the most important plans of the government, adding that nearly $60 billion has been allocated to energy efficiency plans this year.

Zangeneh said effective management of sources of energy and contribution to secure energy supply in the world are pillars of sustainable development in Iran. “These two concepts together with economic development and long-term environment improvement are totally convergent,” he said.

He said the development of modern technologies have been of great help in extraction from non-conventional sources like tar sands, shale oil and gas and deepwater hydrocarbon reservoirs.

“Long-term forecasts show that the oil and gas produced from conventional sources continue to enjoy a dominant role in energy supply,” said Zangeneh.

He said distribution of clean fuel requires price incentive, adding: “The financial policies of the countries should also promote this trend to attract more investment for production and consumption of cleaner fuels. People who are consuming low-cost but polluting fuel have to pay higher costs for a better environment.”

Zangeneh said Iran holds 33.7 tcm of proven natural gas reserves and 157.3 billion barrels of proven oil reserves. He added that Iran’s oil and gas production should comply with its reserves.

 

Electricity from Clean Energies

 

Iran’s energy minister said his ministry is looking for ways of efficient energy use in order to enhance electricity generation capacity.

“Due to its effective natural and human resources, Iran is seeking to develop renewable energies in order to safeguard the environment and preserve its exports capacity,” Chitchian told the forum.

He said renewable and clean energies would facilitate improvement of environmental conditions in the electricity industry, adding: “Our country’s share of solar and wind energies is increasing.”

Chitchian said the share of renewable energies in other countries’ energy mix is on the rise due to technological progress and lower economic costs. “Solar and wind energy technologies make up the highest growth rate in the world.”

The minister said Iran is the largest producer and consumer of energy in the world, noting that the country has to pay more attention to the issues of environment, technology and economic developments.

 

New Pricing Formula

 

Nematzadeh told the forum that more investors will be willing to invest in energy efficiency projects if the price of energy carriers is set for the long-term.

He called for the determination of a formula to set energy carrier prices for the long-term so that investors would be able to make plans for efficient use of energy.

“Unfortunately, the current prices set for energy carriers are for one year and that is why the investors are in doubt about the future of their investment and rate of return,” he said.

Nematzadeh said Iran, which sits atop huge hydrocarbon reserves, shoulders a heavy responsibility with regard to energy efficiency.

He underscored the significance of development of renewable energies, saying: “We are eager to work with ministries of petroleum and energy in this field. Many industrial units like MAPNA (Iran Power Plant Projects Management Company) have already started manufacturing wind turbines.”

 

More Investment in Joint Fields

 

Ali Larijani, Iran’s parliament spokesman, called for more investment in the oil and gas fields the country shares with neighbors.

“Iran’s massive oil and gas reserves are an important advantage and the figures released in the year 1391 (ended in March 2013) indicate that the recoverable hydrocarbon reserves in Iran equal 364 billion barrels of crude oil – 43% oil and 57% gas,” he said.

Larijani added that the figures include 156 billion barrels of oil – including 111 billion barrels onshore and 45 billion barrels offshore.

He stressed the need for safeguarding these reservoirs, noting that Iran enjoys the longest background in the energy sector.

“Oil, gas and electricity have an old background in Iran and we have to reduce energy intensity by proper planning,” he said.

Larijani said he has witnessed valuable achievements by Iranian companies during his recent visit to the giant South Pars gas field. “Most Iranian contractor companies have shown an acceptable performance in South Pars.”

He said the parliament will have to focus more on the production sector in order to encourage private investors.

“Iran benefits from its oil and gas to stabilize energy supply to the world,” said Larijani.

He stressed the need for more investment in renewable energies, particularly wind and solar energy, saying: “Given the existing potentials in Iran, the grounds should be prepared for facilitating the development of renewable energies.”

He said that sustainable security in Iran has led to strong democratic bases in the country.

“Given the stable conditions in our country, Iran is a good venue for investment. There are a lot of advantages for attracting Iranian and foreign investors,” said Larijani.

 

Energy Poverty Declines   

 

Director General of the OPEC Fund for International Development (OFID) Suleiman J Al-Herbish also addressed Tehran energy forum.

“The petroleum industry needs to strengthen its leading role to be more effective in providing global energy security, while at the same time contributing to the eradication of energy poverty,” he said.

Al-Herbish was addressing the assemblage of energy experts, engineers, scientists and researchers, as well as prominent international figures and government authorities from across the globe.

Al-Herbish used his keynote address to rally support from the petroleum industry in bringing modern energy to the poor. “Acting together, our resources can surely make a huge difference to progress towards affordable, clean and efficient energy for all,” he said.

 

ECO Electricity Market

 

Secretary General of the Economic Cooperation Organization (ECO) Shamil Aleskerov said the “ECO Plan of Action for Energy Cooperation” (2011-2015), adopted by the energy ministers of member states in 2010, envisages the energy cooperation in the ECO region from the “sustainable development perspective, enhancing the imperative of energy efficiency.”

“In the electric power sector, the initiative of establishment of an ECO regional electricity market has gained a new momentum and our experts are now preparing the ground for the early launching of the envisaged regional electricity market, having been guided by success stories in the world, including the successfully implemented electricity market in the Nordic countries,” he told the energy conference.

“It was decided to start this process by establishing a regional electricity market as a pilot project with initial participation of Iran and Turkey and eventual further participation by other interested member states,” he added.

Aleskerov said: “On renewable energy resources, I would  like to inform the distinguished participants that since the ECO Region enjoys great potential for utilizing renewable sources of energy such as hydro, geothermal, solar, wind, and biomass, the experts and energy officials from the ECO member states have been active in the last four years to make all necessary arrangements needed for greater integration of renewable energy resources in the energy production to contribute to meeting the energy requirements of the member states and the Region as a whole, while decreasing the negative impact of the energy sector on the environment.”

“The ECO Experts Group on renewable energy has been established and started its work, four workshops convened, allowing the member states to get acquainted with the experience of adopting and use of the renewable energies and the respective technologies and equipment, addressing different aspects related to their introduction and use in their economies,” he said, adding: “We are planning to strengthen the cooperation in this field by preparing all renewable energy profile of the region and paying more attention to the capacity building and policy development.”

 

Energy Law

 

Urban Rusnak, Secretary General, Energy Charter Treaty (ECT), said the main objective of this treaty is to adopt regulations for guaranteeing energy security and sustainable development.

He said that ECT seeks to encourage all countries to contribute to the drafting of secure energy regimes with a view to achieving sustainable development and energy security.

Rusnak said most ECT member states are cooperating closely with each other and they collaborate effectively with other international organizations and agencies.

He said Jordan, Pakistan and Mauritania are in the process of joining the ECT which, he said, could help boost energy cooperation across the globe.

Rusnak said ECT makes its plans based on the regulations of its member states, adding that energy efficiency, energy security and energy transit are among the treaty’s main responsibilities.

Other tasks assigned to ECT include guaranteeing energy transit, settlement of disputes between investors and host countries, as well as energy efficiency.

Rusnak said the treaty obliges member states to respect fair energy distribution.

The ECT is an international agreement which establishes a multilateral framework for cross-border co-operations in the energy industry. The treaty covers all aspects of commercial energy activities including trade, transit, investments and energy efficiency. The treaty is legally binding, including dispute resolution procedures.

In contrast to other activities in the Charter process, the emphasis in the work on energy efficiency is not legally binding, but rather on practical implementation of a political commitment to improve energy efficiency. This is promoted through policy discussions based on analysis and exchange of experience between the member countries, invited independent experts and other international organizations.

 

Changing Energy Consumption Pattern

 

Adnan Z. Amin, Director General of International Renewable Energy Agency (IRENA), told the conference that a new industrial revolution is about to happen.

He said the new industrial revolution is marked by the growing use of different types of renewable energies and a change in the energy consumption pattern.

Amin said $2,600 billion dollars has been invested in the renewable energy sector across the world over the past ten years, adding that it promises a bright future.

He said modern lifestyle has provided a proper market for renewable energies and added that the demand for renewable energies is rising on a daily basis.

Amin said the world population is forecasted to go beyond nine billion by 2015 with most of them living in cities. This population, he said, will have to use renewable energies, as oil and gas reserves will decline.

He said governments and big companies need to invest in the renewable energies sector.

IRENA, founded in 2009, is an intergovernmental organization aimed at promoting adoption and sustainable use of renewable energy. Its statute entered into force on 8 July 2010. The agency is headquartered in Abu Dhabi.

IRENA aims to become the main driving force in promoting a transition towards the use of renewable energy on a global scale.

Acting as the global voice for renewable energies, IRENA will provide practical advice and support for both industrialized and developing countries, help them improve their regulatory frameworks and build capacity. The agency will facilitate access to all relevant information including reliable data on the potential of renewable energy, best practices, effective financial mechanisms and state-of-the-art technological expertise.

IRENA provides advice and support to governments on renewable energy policy, capacity building, and technology transfer. IRENA will also co-ordinate with existing renewable energy organizations.

 

Iran Decisive Role in Energy Supply

 

Hossein Razavi, an energy economist with the World Bank in the Energy Division of the East Asia and Pacific Projects Department, said in the conference that Iran has a decisive role to play in energy supply in the region due to its strategic position and huge gas reserves.

“The Iranian government and parliament have to define a specific strategy for the future of Iran’s oil and gas industry,” he said.

Razavi added that most Middle East countries, except for Iran and Qatar, need to import gas, noting that Iran will have a profitable market in the future.

He said over the coming decade demand for gas will keep rising. “Therefore, exporters of this clean fuel will be able to have good financial resources.”

Razavi said the US oil consumption stands at 18 mb/d, 8 mb/d of which is being imported.

“But surveys show that in the near future, shale oil will add 5 mb/d to its production,” he said.

Razavi said gas will be an important factor in future energy consumption.

“In the Middle East, the United Arab Emirates, Jordan, Tunisia, Syria, Morocco, Lebanon, Oman, Saudi Arabia and Kuwait need to receive gas,” he said.

Razavi said Yemen and Oman both export liquefied natural gas (LNG), adding that their gas production is enough to be considered net exporters.

“Therefore, Iran will be able to supply gas to Bahrain, Saudi Arabia and Kuwait in the future. However, it depends on Iran’s gas policies in the future,” he said.

Energy Management with Renewable Sources

 

 

The tenth international energy forum was held in Tehran on August 26. The motto of the forum was “Efficiency in Resource Management, Excellency in Energy Industry.”

Iranian energy officials and foreign guests exchanged views about management of energy sources, energy and economy as well as energy and environment technology.

The participants in the event included Iran’s Petroleum Minister Bijan Namdar Zangeneh, Minister of Energy Hamid Chitchian, Minister of Industry, Mine and Trade Mohammad-Reza Nematzadeh, Tehran mayor Mohammad-Baqer Qalibaf, energy ministers of Senegal, Russia, Syria and Kyrgyzstan as well as a number of senior managers from Germany, the Netherlands, the US, Hong Kong, Lebanon and Turkey.   

 

Iran’s Clean Fuel Mix

 

Iran’s petroleum minister said Iran has expanded gas distribution network and is installing more compressed natural gas (CNG) stations across the country, noting that Iran’s fuel mix is among the least polluting in the world.

“In order to reach the production capacity matching the amount of our oil and gas reserves, we try to acquire the best technology in the world and win footholds in secure markets through cooperation with international oil, service and engineering companies,” the minister said.

In this way, Zangeneh said, the economic objectives of the country will be realized while Iran will be able to strengthen its position in the world oil markets.

Noting that 70 percent of Iran’s energy is supplied by natural gas, he said: “Currently, 87% of Iran’s population enjoy natural gas distribution network and the extent of gas consumption among urban consumers has reached 98 percent.”

“In the transportation sector, there are more than 2,000 fuel stations in the country. They supply 20 mcm/d of natural gas equivalent to more than three million cars and this figure is unique in the world,” said Zangeneh.

The minister said environmental issues, particularly energy efficiency, are among the most important plans of the government, adding that nearly $60 billion has been allocated to energy efficiency plans this year.

Zangeneh said effective management of sources of energy and contribution to secure energy supply in the world are pillars of sustainable development in Iran. “These two concepts together with economic development and long-term environment improvement are totally convergent,” he said.

He said the development of modern technologies have been of great help in extraction from non-conventional sources like tar sands, shale oil and gas and deepwater hydrocarbon reservoirs.

“Long-term forecasts show that the oil and gas produced from conventional sources continue to enjoy a dominant role in energy supply,” said Zangeneh.

He said distribution of clean fuel requires price incentive, adding: “The financial policies of the countries should also promote this trend to attract more investment for production and consumption of cleaner fuels. People who are consuming low-cost but polluting fuel have to pay higher costs for a better environment.”

Zangeneh said Iran holds 33.7 tcm of proven natural gas reserves and 157.3 billion barrels of proven oil reserves. He added that Iran’s oil and gas production should comply with its reserves.

 

Electricity from Clean Energies

 

Iran’s energy minister said his ministry is looking for ways of efficient energy use in order to enhance electricity generation capacity.

“Due to its effective natural and human resources, Iran is seeking to develop renewable energies in order to safeguard the environment and preserve its exports capacity,” Chitchian told the forum.

He said renewable and clean energies would facilitate improvement of environmental conditions in the electricity industry, adding: “Our country’s share of solar and wind energies is increasing.”

Chitchian said the share of renewable energies in other countries’ energy mix is on the rise due to technological progress and lower economic costs. “Solar and wind energy technologies make up the highest growth rate in the world.”

The minister said Iran is the largest producer and consumer of energy in the world, noting that the country has to pay more attention to the issues of environment, technology and economic developments.

 

New Pricing Formula

 

Nematzadeh told the forum that more investors will be willing to invest in energy efficiency projects if the price of energy carriers is set for the long-term.

He called for the determination of a formula to set energy carrier prices for the long-term so that investors would be able to make plans for efficient use of energy.

“Unfortunately, the current prices set for energy carriers are for one year and that is why the investors are in doubt about the future of their investment and rate of return,” he said.

Nematzadeh said Iran, which sits atop huge hydrocarbon reserves, shoulders a heavy responsibility with regard to energy efficiency.

He underscored the significance of development of renewable energies, saying: “We are eager to work with ministries of petroleum and energy in this field. Many industrial units like MAPNA (Iran Power Plant Projects Management Company) have already started manufacturing wind turbines.”

 

More Investment in Joint Fields

 

Ali Larijani, Iran’s parliament spokesman, called for more investment in the oil and gas fields the country shares with neighbors.

“Iran’s massive oil and gas reserves are an important advantage and the figures released in the year 1391 (ended in March 2013) indicate that the recoverable hydrocarbon reserves in Iran equal 364 billion barrels of crude oil – 43% oil and 57% gas,” he said.

Larijani added that the figures include 156 billion barrels of oil – including 111 billion barrels onshore and 45 billion barrels offshore.

He stressed the need for safeguarding these reservoirs, noting that Iran enjoys the longest background in the energy sector.

“Oil, gas and electricity have an old background in Iran and we have to reduce energy intensity by proper planning,” he said.

Larijani said he has witnessed valuable achievements by Iranian companies during his recent visit to the giant South Pars gas field. “Most Iranian contractor companies have shown an acceptable performance in South Pars.”

He said the parliament will have to focus more on the production sector in order to encourage private investors.

“Iran benefits from its oil and gas to stabilize energy supply to the world,” said Larijani.

He stressed the need for more investment in renewable energies, particularly wind and solar energy, saying: “Given the existing potentials in Iran, the grounds should be prepared for facilitating the development of renewable energies.”

He said that sustainable security in Iran has led to strong democratic bases in the country.

“Given the stable conditions in our country, Iran is a good venue for investment. There are a lot of advantages for attracting Iranian and foreign investors,” said Larijani.

 

Energy Poverty Declines   

 

Director General of the OPEC Fund for International Development (OFID) Suleiman J Al-Herbish also addressed Tehran energy forum.

“The petroleum industry needs to strengthen its leading role to be more effective in providing global energy security, while at the same time contributing to the eradication of energy poverty,” he said.

Al-Herbish was addressing the assemblage of energy experts, engineers, scientists and researchers, as well as prominent international figures and government authorities from across the globe.

Al-Herbish used his keynote address to rally support from the petroleum industry in bringing modern energy to the poor. “Acting together, our resources can surely make a huge difference to progress towards affordable, clean and efficient energy for all,” he said.

 

ECO Electricity Market

 

Secretary General of the Economic Cooperation Organization (ECO) Shamil Aleskerov said the “ECO Plan of Action for Energy Cooperation” (2011-2015), adopted by the energy ministers of member states in 2010, envisages the energy cooperation in the ECO region from the “sustainable development perspective, enhancing the imperative of energy efficiency.”

“In the electric power sector, the initiative of establishment of an ECO regional electricity market has gained a new momentum and our experts are now preparing the ground for the early launching of the envisaged regional electricity market, having been guided by success stories in the world, including the successfully implemented electricity market in the Nordic countries,” he told the energy conference.

“It was decided to start this process by establishing a regional electricity market as a pilot project with initial participation of Iran and Turkey and eventual further participation by other interested member states,” he added.

Aleskerov said: “On renewable energy resources, I would  like to inform the distinguished participants that since the ECO Region enjoys great potential for utilizing renewable sources of energy such as hydro, geothermal, solar, wind, and biomass, the experts and energy officials from the ECO member states have been active in the last four years to make all necessary arrangements needed for greater integration of renewable energy resources in the energy production to contribute to meeting the energy requirements of the member states and the Region as a whole, while decreasing the negative impact of the energy sector on the environment.”

“The ECO Experts Group on renewable energy has been established and started its work, four workshops convened, allowing the member states to get acquainted with the experience of adopting and use of the renewable energies and the respective technologies and equipment, addressing different aspects related to their introduction and use in their economies,” he said, adding: “We are planning to strengthen the cooperation in this field by preparing all renewable energy profile of the region and paying more attention to the capacity building and policy development.”

 

Energy Law

 

Urban Rusnak, Secretary General, Energy Charter Treaty (ECT), said the main objective of this treaty is to adopt regulations for guaranteeing energy security and sustainable development.

He said that ECT seeks to encourage all countries to contribute to the drafting of secure energy regimes with a view to achieving sustainable development and energy security.

Rusnak said most ECT member states are cooperating closely with each other and they collaborate effectively with other international organizations and agencies.

He said Jordan, Pakistan and Mauritania are in the process of joining the ECT which, he said, could help boost energy cooperation across the globe.

Rusnak said ECT makes its plans based on the regulations of its member states, adding that energy efficiency, energy security and energy transit are among the treaty’s main responsibilities.

Other tasks assigned to ECT include guaranteeing energy transit, settlement of disputes between investors and host countries, as well as energy efficiency.

Rusnak said the treaty obliges member states to respect fair energy distribution.

The ECT is an international agreement which establishes a multilateral framework for cross-border co-operations in the energy industry. The treaty covers all aspects of commercial energy activities including trade, transit, investments and energy efficiency. The treaty is legally binding, including dispute resolution procedures.

In contrast to other activities in the Charter process, the emphasis in the work on energy efficiency is not legally binding, but rather on practical implementation of a political commitment to improve energy efficiency. This is promoted through policy discussions based on analysis and exchange of experience between the member countries, invited independent experts and other international organizations.

 

Changing Energy Consumption Pattern

 

Adnan Z. Amin, Director General of International Renewable Energy Agency (IRENA), told the conference that a new industrial revolution is about to happen.

He said the new industrial revolution is marked by the growing use of different types of renewable energies and a change in the energy consumption pattern.

Amin said $2,600 billion dollars has been invested in the renewable energy sector across the world over the past ten years, adding that it promises a bright future.

He said modern lifestyle has provided a proper market for renewable energies and added that the demand for renewable energies is rising on a daily basis.

Amin said the world population is forecasted to go beyond nine billion by 2015 with most of them living in cities. This population, he said, will have to use renewable energies, as oil and gas reserves will decline.

He said governments and big companies need to invest in the renewable energies sector.

IRENA, founded in 2009, is an intergovernmental organization aimed at promoting adoption and sustainable use of renewable energy. Its statute entered into force on 8 July 2010. The agency is headquartered in Abu Dhabi.

IRENA aims to become the main driving force in promoting a transition towards the use of renewable energy on a global scale.

Acting as the global voice for renewable energies, IRENA will provide practical advice and support for both industrialized and developing countries, help them improve their regulatory frameworks and build capacity. The agency will facilitate access to all relevant information including reliable data on the potential of renewable energy, best practices, effective financial mechanisms and state-of-the-art technological expertise.

IRENA provides advice and support to governments on renewable energy policy, capacity building, and technology transfer. IRENA will also co-ordinate with existing renewable energy organizations.

 

Iran Decisive Role in Energy Supply

 

Hossein Razavi, an energy economist with the World Bank in the Energy Division of the East Asia and Pacific Projects Department, said in the conference that Iran has a decisive role to play in energy supply in the region due to its strategic position and huge gas reserves.

“The Iranian government and parliament have to define a specific strategy for the future of Iran’s oil and gas industry,” he said.

Razavi added that most Middle East countries, except for Iran and Qatar, need to import gas, noting that Iran will have a profitable market in the future.

He said over the coming decade demand for gas will keep rising. “Therefore, exporters of this clean fuel will be able to have good financial resources.”

Razavi said the US oil consumption stands at 18 mb/d, 8 mb/d of which is being imported.

“But surveys show that in the near future, shale oil will add 5 mb/d to its production,” he said.

Razavi said gas will be an important factor in future energy consumption.

“In the Middle East, the United Arab Emirates, Jordan, Tunisia, Syria, Morocco, Lebanon, Oman, Saudi Arabia and Kuwait need to receive gas,” he said.

Razavi said Yemen and Oman both export liquefied natural gas (LNG), adding that their gas production is enough to be considered net exporters.

“Therefore, Iran will be able to supply gas to Bahrain, Saudi Arabia and Kuwait in the future. However, it depends on Iran’s gas policies in the future,” he said.

Iran Setting Up Petchem Development Fund

 

Iran’s National Petrochemical Company (NPC) expects to earn $80 billion from petrochemical products by 2020. NPC’s current revenue is nearly $25 billion and given Iranian petrochemical potentialities, such an objective is realizable. New managers in the petrochemical industry are seriously determined to realize this objective as hopes have soared following the removal of sanctions on the country’s petrochemical sector under the aegis of Iran’s nuclear deal with six world powers. The easing of sanctions is expected to encourage domestic and foreign investors for more investment in the petrochemical industry.

The administration of President Hassan Rouhani plans to set up a petrochemical investment development fund in order to facilitate investment and inject financial resources into petrochemical projects.

In order to get more acquainted with the conditions of Iran’s petrochemical industry after the easing of sanctions, Iran Petroleum has interviewed Abbas Sheri-Moqaddam, managing director of NPC.

 

Q: As the first question, would you please tell us about production and investment level in Iran’s petrochemical sector as the European Union has lifted sanctions and the country’s gas production has increased? Have foreign investors expressed willingness in investing in Iran?

A: Over recent years, the development of petrochemical industry has faced no hurdles. Improvement in Iran’s international relations will boost investments in Iran, but during this short period of time, many domestic and foreign investors have shown willingness to invest in petrochemical projects although sanctions remain in place. If sanctions are lifted the demands will definitely increase. Investors want long-term gas pricing and we hope that a long-term price is set in order to facilitate investment in petrochemical projects.  As you know REACH (registration, evaluation and authorization of chemicals) is the EU regulation governing the placement on the market of chemical substances. The countries exporting chemicals to the EU are required to obtain the necessary certificates. The private companies can demand permission or have their products exported through NPC.

The current production capacity of Iran’s petrochemicals is 60 million tons, but only 40 million tons of this capacity is being used. It is necessary that the vacant capacities would be used by planning and feedstock supply.

Undoubtedly, the improvement of Iran’s relations at the international level and attraction of more investment will lead to a brighter future for the petrochemical industry. We hope that the Geneva talks would be successful.

Construction of facilities for feeding new petrochemical plants with private investment, resolving the problems of petrochemical plants in feedstock supply, cooperation with government and parliament on feedstock pricing and its modification, revision of investment attraction progress and financing petrochemical projects are among the main activities carried out by the NPC. The country’s petrochemical sector is currently run by the private sector and the NPC’s role has been to manage revised projects and adopting a reaction system.

 

Q: How do you think Iran’s nuclear accord with six world powers would be important for the country’s petrochemical industry in benefiting from the state-of-the-art technology? Does this industry need foreign investment and technology?

A: Under the present circumstances, the success of Iranian negotiating team in their talks with the P5+1 is thoroughly crucial. In case a permanent accord is reached, the window of development will open and this overture will bring modern technology and foreign capital for the petrochemical industry. Then, we can expect another big jump in the petrochemical industry.

NPC is no longer to operate any project; therefore, this company will only introduce investment opportunities while providing technical, specialized and information services to investors. Therefore, it would no longer be possible to speak about the timeframe of implementation of the projects.

However, the law authorizes the NPC to allocate budget for projects in impoverished regions if no investor volunteers to work.

 

Q: How do you see the future of petrochemical production in Iran? There are many half-finished petrochemical projects waiting for technology and investment. What do you think will happen to these projects?

A: Once the company’s projects have been implemented and the petrochemical plants reach their nominal capacity, the country’s production will reach 180 million tons a year. Maximum capacity in petrochemical plants has a prioritized plan of NPC over the past one year. The rated capacity of petrochemical plants is currently 60 million tons, while they produce only 40 million tons. Therefore, without any specific investment, the level of production could be raised by 20 million tons.

Over the past one year, the NPC has been focusing on the completion of 15 projects out of the 62 abandoned projects which were defined under the fourth and fifth five-year economic development plans. Besides these 62 projects, we have defined 36 new projects. In total, the country’s petrochemical production capacity will increase by 60 million tons, but we need government assistance for building the required infrastructure for attraction of investment. Fortunately, the infrastructure for the 62 projects is ready.  Existence of infrastructure will encourage investors to invest. Therefore, we have to provide the required infrastructure and to that effect, we are in talks with the government and parliament.

Of 15 prioritized projects, Kavian-2, Lorestan, Mahabad and Takht-e Jamshid petrochemical plants and Marvdasht urea plant will come on-stream this year. We are trying to provide the necessary finance for projects in the second phase of Assaluyeh through National Development Fund of Iran (NDFI) or through finance from China so that they would resume their activities. The finance of five projects by China has been finalized and the Central Bank of Iran is hoped to endorse these finances so that these projects would be activated.

 

Q: What are the government plans for accelerating half-finished petrochemical projects?

A: Currently, some shareholders in the 62 petrochemical projects are facing financial problems, but the establishment of petrochemical development fund will resolve all these problems. This fund is expected to be set up with the cooperation of Tehran Stock Exchange as well as some banks in the country. The banks, investors and people can contribute to this fund by buying stocks; therefore, financing the projects will no longer need selling bonds.

Establishment of petrochemical development fund is the best option for financing the projects because a major investor or a bank will be always involved. In the last step, the shares will be sold to individuals on the stock market. Another positive advantage of the petrochemical development fund is that when the investors want to sell their stocks they will no longer return participation bonds and they will sell their stocks to someone else on the market.

 

Q: Would you please tell us about the prospects of petrochemical industry in the 2025 Vision Plan?

A: We will make efforts to get the top rank in the world in terms of the value of petrochemical products by 2025. We also intend to use 21 percent of the country’s total annual natural gas production, or 86 bcm, as feedstock in this industry. Acquiring a 40-percent share of the country’s non-oil exports, communications between 30,000 downstream and upstream units through feedstock, poverty eradication and job creation in this industry are among other objectives of the NPC under the 2025 Vision Plan.

Iran Setting Up Petchem Development Fund

 

Iran’s National Petrochemical Company (NPC) expects to earn $80 billion from petrochemical products by 2020. NPC’s current revenue is nearly $25 billion and given Iranian petrochemical potentialities, such an objective is realizable. New managers in the petrochemical industry are seriously determined to realize this objective as hopes have soared following the removal of sanctions on the country’s petrochemical sector under the aegis of Iran’s nuclear deal with six world powers. The easing of sanctions is expected to encourage domestic and foreign investors for more investment in the petrochemical industry.

The administration of President Hassan Rouhani plans to set up a petrochemical investment development fund in order to facilitate investment and inject financial resources into petrochemical projects.

In order to get more acquainted with the conditions of Iran’s petrochemical industry after the easing of sanctions, Iran Petroleum has interviewed Abbas Sheri-Moqaddam, managing director of NPC.

 

Q: As the first question, would you please tell us about production and investment level in Iran’s petrochemical sector as the European Union has lifted sanctions and the country’s gas production has increased? Have foreign investors expressed willingness in investing in Iran?

A: Over recent years, the development of petrochemical industry has faced no hurdles. Improvement in Iran’s international relations will boost investments in Iran, but during this short period of time, many domestic and foreign investors have shown willingness to invest in petrochemical projects although sanctions remain in place. If sanctions are lifted the demands will definitely increase. Investors want long-term gas pricing and we hope that a long-term price is set in order to facilitate investment in petrochemical projects.  As you know REACH (registration, evaluation and authorization of chemicals) is the EU regulation governing the placement on the market of chemical substances. The countries exporting chemicals to the EU are required to obtain the necessary certificates. The private companies can demand permission or have their products exported through NPC.

The current production capacity of Iran’s petrochemicals is 60 million tons, but only 40 million tons of this capacity is being used. It is necessary that the vacant capacities would be used by planning and feedstock supply.

Undoubtedly, the improvement of Iran’s relations at the international level and attraction of more investment will lead to a brighter future for the petrochemical industry. We hope that the Geneva talks would be successful.

Construction of facilities for feeding new petrochemical plants with private investment, resolving the problems of petrochemical plants in feedstock supply, cooperation with government and parliament on feedstock pricing and its modification, revision of investment attraction progress and financing petrochemical projects are among the main activities carried out by the NPC. The country’s petrochemical sector is currently run by the private sector and the NPC’s role has been to manage revised projects and adopting a reaction system.

 

Q: How do you think Iran’s nuclear accord with six world powers would be important for the country’s petrochemical industry in benefiting from the state-of-the-art technology? Does this industry need foreign investment and technology?

A: Under the present circumstances, the success of Iranian negotiating team in their talks with the P5+1 is thoroughly crucial. In case a permanent accord is reached, the window of development will open and this overture will bring modern technology and foreign capital for the petrochemical industry. Then, we can expect another big jump in the petrochemical industry.

NPC is no longer to operate any project; therefore, this company will only introduce investment opportunities while providing technical, specialized and information services to investors. Therefore, it would no longer be possible to speak about the timeframe of implementation of the projects.

However, the law authorizes the NPC to allocate budget for projects in impoverished regions if no investor volunteers to work.

 

Q: How do you see the future of petrochemical production in Iran? There are many half-finished petrochemical projects waiting for technology and investment. What do you think will happen to these projects?

A: Once the company’s projects have been implemented and the petrochemical plants reach their nominal capacity, the country’s production will reach 180 million tons a year. Maximum capacity in petrochemical plants has a prioritized plan of NPC over the past one year. The rated capacity of petrochemical plants is currently 60 million tons, while they produce only 40 million tons. Therefore, without any specific investment, the level of production could be raised by 20 million tons.

Over the past one year, the NPC has been focusing on the completion of 15 projects out of the 62 abandoned projects which were defined under the fourth and fifth five-year economic development plans. Besides these 62 projects, we have defined 36 new projects. In total, the country’s petrochemical production capacity will increase by 60 million tons, but we need government assistance for building the required infrastructure for attraction of investment. Fortunately, the infrastructure for the 62 projects is ready.  Existence of infrastructure will encourage investors to invest. Therefore, we have to provide the required infrastructure and to that effect, we are in talks with the government and parliament.

Of 15 prioritized projects, Kavian-2, Lorestan, Mahabad and Takht-e Jamshid petrochemical plants and Marvdasht urea plant will come on-stream this year. We are trying to provide the necessary finance for projects in the second phase of Assaluyeh through National Development Fund of Iran (NDFI) or through finance from China so that they would resume their activities. The finance of five projects by China has been finalized and the Central Bank of Iran is hoped to endorse these finances so that these projects would be activated.

 

Q: What are the government plans for accelerating half-finished petrochemical projects?

A: Currently, some shareholders in the 62 petrochemical projects are facing financial problems, but the establishment of petrochemical development fund will resolve all these problems. This fund is expected to be set up with the cooperation of Tehran Stock Exchange as well as some banks in the country. The banks, investors and people can contribute to this fund by buying stocks; therefore, financing the projects will no longer need selling bonds.

Establishment of petrochemical development fund is the best option for financing the projects because a major investor or a bank will be always involved. In the last step, the shares will be sold to individuals on the stock market. Another positive advantage of the petrochemical development fund is that when the investors want to sell their stocks they will no longer return participation bonds and they will sell their stocks to someone else on the market.

 

Q: Would you please tell us about the prospects of petrochemical industry in the 2025 Vision Plan?

A: We will make efforts to get the top rank in the world in terms of the value of petrochemical products by 2025. We also intend to use 21 percent of the country’s total annual natural gas production, or 86 bcm, as feedstock in this industry. Acquiring a 40-percent share of the country’s non-oil exports, communications between 30,000 downstream and upstream units through feedstock, poverty eradication and job creation in this industry are among other objectives of the NPC under the 2025 Vision Plan.

Petroleum Delivery Capacity at 120b Liters

 

Iran has to extend its pipelines carrying oil products to refineries in order to catch up with its oil and gas exploration and extraction. The distribution network across the country is the vital artery of Iran’s economy and industry. Since Iran’s crude oil production centers are located in southern regions, the crude oil fed into refineries need to be supplied through pipelines stretching from south to north while passing through treacherous regions.

Iranian Oil Pipelines and Telecommunication Company (IOPTC), a subsidiary of National Iranian Oil Refining and Distribution Company (NIORDC), is tasked with delivering crude oil from production spots to refineries and transferring petroleum products from refineries and ports to tank farms and major consumption centers like power plants and petrochemical plants.

Last calendar year which ended in March20, IOPTC transferred nearly 67 billion liters of crude oil and 54 billion liters of petroleum products across the country.

Abbas-Ali Jaafari-Nasab, managing director of IOPTC, says the company handles 70 percent of crude oil and petroleum products distribution across Iran through 14,000 kilometers of pipeline.

He said in an interview that an industrial telecommunications network is steering the transmission operations.

“This industrial telecom network, established near oil products pipeline network, is equipped with 295 telecom stations and more than 4,000 kilometers of fiber optics,” he said, adding that the telecom network is also providing services to sectors other than Iran’s petroleum industry.

 

New Pipeline Construction      

 

Jaafari-Nasab said the crude pipelines are feeding refineries and carrying products, adding: “In case there is any plan for the construction of new refineries, the required pipelines should be also constructed in parallel.”

“Currently, Persian Gulf Star Refinery is under construction; therefore, pipeline has been laid out for supplying feedstock to this refinery from Assaluyeh and Bandar Abbas. With the start-up of Persian Gulf Star Refinery, this pipeline will become operational,” he said.

Jaafari-Nasab said new pipelines may be envisaged to be constructed as production and consumption rate are both rising.

“Currently, Naein-Kashan-Rey and Tabriz-Khoy-Urmia pipelines are under construction for the transfer of petroleum products,” he said.

He added that a pipeline is to be stretched from Abadan to Tehran, one from Bandar Abbas to Rafsanjan and another one from Rafsanjan to Yazd and Naein.

Noting that construction of pipelines often takes three to four years, he said that a section of Abadan-Tehran pipeline is complete and the second section is to be assigned to a contract.

A 650-kilometer pipeline stretching from Sabzab to Shazand and Rey is also to be constructed by Iran Oil Engineering and Construction Company (IOEC).

Jaafari-Nasab said telecom systems are switching from analog to digital. He said the first phase of this transformation has been completed and the second phase is under way.

He predicted that analog-to-digital switch will have been done by March next year.

The official said crude oil pipelines are working at full capacity, but there are some shortcomings with regards to the distribution of oil products. He said new projects are being designed to make up for these shortcomings.

 

Investment Opportunities

 

Jaafari-Nasab referred to projects under way by IOPTC, including the renovation of transmission pipelines, saying: “One of methods used in this sector is monitoring pipelines through intelligent pig running in order to examine the interior of the pipelines. With this method, the internal or external corrosion is detected in order to consider the required repair.”

“In parallel with this project, there are pipeline renovation projects for changing or repairing some parts and changing the coating of pipelines. Foreign companies can contribute to these projects, particularly in using new coatings and applying new methods for renovation of pipelines,” he said.

Jaafari-Nasab said foreign companies can also provide rotary machinery and highly-effective equipment to replace old systems whose efficiency has declined.

“Today, with the emergence of leading contractor companies, domestic potentialities in the sector of equipment and machinery supply have enhanced. However, foreign companies can transfer new technologies to Iran on the one hand and provide the grounds for their own activity on the other,” he said.

He said foreign companies can invest in the construction of pipelines or contribute to the supply of equipment, finance and operation of pipeline projects.

“Foreign companies can participate in the project for the construction of a crude oil transit pipeline stretching from Neka to Jask,” said Jaafari-Nasab.

 

Operating Projects Overseas

 

Jaafari-Nasab said IOPTC is ready to cooperate with foreign companies in operating projects overseas.

“Certain measures have been adopted for gas transmission, and talks have been held with several Caspian Sea littoral states. If crude oil exploration and production in neighboring countries comes to fruition, one of the most appropriate and economical ways of Caspian crude oil transmission from neighboring countries particularly Kazakhstan could be through Iran. The required studies have been conducted to that effect,” he said.

“Currently, there is potential for swapping 370,000 b/d of crude oil, which could soar to 500,000 b/d,” he added.

 

Overhaul

 

Jaafari-Nasab said since some sections of transmission pipelines cross treacherous zones, the maintenance of these pipelines is very difficult. However, there is enough domestic potential for that purpose, he added.

He said the overhaul operations are done regularly on schedule throughout the transmission network.

“These operations are planned based on the function of equipment and their regular monitoring,” said Jaafari-Nasab.

He added that transmission never stops because there are always two systems installed in distribution centers.

“In the past, gas turbines were sent abroad to be repaired, but now domestic companies involved in repairing this equipment are active and they can manufacture 70 percent of the turbine parts,” he said.

Jaafari-Nasab said most rotary machinery currently operating in Iran are made in the US or Europe, adding that turbines, pumps and electro-engines are being manufactured in Iran.

He said Iranian companies have started manufacturing 25-megawatt turbines’ parts, but they mainly work on 4-10 megawatt turbines which are mainly used in Iran.

 

Fuel Supply to Power Plants

 

Jaafari-Nasab said National Iranian Gas Company (NIGC) officials have said that the country’s gas production is expected to increase by 100 mcm/d as new phases of the giant offshore South Pars gas field are expected to come on-stream in the current year.

He said more gas production in the country will lower liquid fuel supply to the power plants.

“By improving the process of fuel supply to power plants, gasoil consumed in the power plants could be exported,” he said. “In winter, power plants shift to consuming liquid fuel due to shortage of natural gas, but they should move to consume natural gas as a clean and low-cost fuel.”

Petroleum Delivery Capacity at 120b Liters

 

Iran has to extend its pipelines carrying oil products to refineries in order to catch up with its oil and gas exploration and extraction. The distribution network across the country is the vital artery of Iran’s economy and industry. Since Iran’s crude oil production centers are located in southern regions, the crude oil fed into refineries need to be supplied through pipelines stretching from south to north while passing through treacherous regions.

Iranian Oil Pipelines and Telecommunication Company (IOPTC), a subsidiary of National Iranian Oil Refining and Distribution Company (NIORDC), is tasked with delivering crude oil from production spots to refineries and transferring petroleum products from refineries and ports to tank farms and major consumption centers like power plants and petrochemical plants.

Last calendar year which ended in March20, IOPTC transferred nearly 67 billion liters of crude oil and 54 billion liters of petroleum products across the country.

Abbas-Ali Jaafari-Nasab, managing director of IOPTC, says the company handles 70 percent of crude oil and petroleum products distribution across Iran through 14,000 kilometers of pipeline.

He said in an interview that an industrial telecommunications network is steering the transmission operations.

“This industrial telecom network, established near oil products pipeline network, is equipped with 295 telecom stations and more than 4,000 kilometers of fiber optics,” he said, adding that the telecom network is also providing services to sectors other than Iran’s petroleum industry.

 

New Pipeline Construction      

 

Jaafari-Nasab said the crude pipelines are feeding refineries and carrying products, adding: “In case there is any plan for the construction of new refineries, the required pipelines should be also constructed in parallel.”

“Currently, Persian Gulf Star Refinery is under construction; therefore, pipeline has been laid out for supplying feedstock to this refinery from Assaluyeh and Bandar Abbas. With the start-up of Persian Gulf Star Refinery, this pipeline will become operational,” he said.

Jaafari-Nasab said new pipelines may be envisaged to be constructed as production and consumption rate are both rising.

“Currently, Naein-Kashan-Rey and Tabriz-Khoy-Urmia pipelines are under construction for the transfer of petroleum products,” he said.

He added that a pipeline is to be stretched from Abadan to Tehran, one from Bandar Abbas to Rafsanjan and another one from Rafsanjan to Yazd and Naein.

Noting that construction of pipelines often takes three to four years, he said that a section of Abadan-Tehran pipeline is complete and the second section is to be assigned to a contract.

A 650-kilometer pipeline stretching from Sabzab to Shazand and Rey is also to be constructed by Iran Oil Engineering and Construction Company (IOEC).

Jaafari-Nasab said telecom systems are switching from analog to digital. He said the first phase of this transformation has been completed and the second phase is under way.

He predicted that analog-to-digital switch will have been done by March next year.

The official said crude oil pipelines are working at full capacity, but there are some shortcomings with regards to the distribution of oil products. He said new projects are being designed to make up for these shortcomings.

 

Investment Opportunities

 

Jaafari-Nasab referred to projects under way by IOPTC, including the renovation of transmission pipelines, saying: “One of methods used in this sector is monitoring pipelines through intelligent pig running in order to examine the interior of the pipelines. With this method, the internal or external corrosion is detected in order to consider the required repair.”

“In parallel with this project, there are pipeline renovation projects for changing or repairing some parts and changing the coating of pipelines. Foreign companies can contribute to these projects, particularly in using new coatings and applying new methods for renovation of pipelines,” he said.

Jaafari-Nasab said foreign companies can also provide rotary machinery and highly-effective equipment to replace old systems whose efficiency has declined.

“Today, with the emergence of leading contractor companies, domestic potentialities in the sector of equipment and machinery supply have enhanced. However, foreign companies can transfer new technologies to Iran on the one hand and provide the grounds for their own activity on the other,” he said.

He said foreign companies can invest in the construction of pipelines or contribute to the supply of equipment, finance and operation of pipeline projects.

“Foreign companies can participate in the project for the construction of a crude oil transit pipeline stretching from Neka to Jask,” said Jaafari-Nasab.

 

Operating Projects Overseas

 

Jaafari-Nasab said IOPTC is ready to cooperate with foreign companies in operating projects overseas.

“Certain measures have been adopted for gas transmission, and talks have been held with several Caspian Sea littoral states. If crude oil exploration and production in neighboring countries comes to fruition, one of the most appropriate and economical ways of Caspian crude oil transmission from neighboring countries particularly Kazakhstan could be through Iran. The required studies have been conducted to that effect,” he said.

“Currently, there is potential for swapping 370,000 b/d of crude oil, which could soar to 500,000 b/d,” he added.

 

Overhaul

 

Jaafari-Nasab said since some sections of transmission pipelines cross treacherous zones, the maintenance of these pipelines is very difficult. However, there is enough domestic potential for that purpose, he added.

He said the overhaul operations are done regularly on schedule throughout the transmission network.

“These operations are planned based on the function of equipment and their regular monitoring,” said Jaafari-Nasab.

He added that transmission never stops because there are always two systems installed in distribution centers.

“In the past, gas turbines were sent abroad to be repaired, but now domestic companies involved in repairing this equipment are active and they can manufacture 70 percent of the turbine parts,” he said.

Jaafari-Nasab said most rotary machinery currently operating in Iran are made in the US or Europe, adding that turbines, pumps and electro-engines are being manufactured in Iran.

He said Iranian companies have started manufacturing 25-megawatt turbines’ parts, but they mainly work on 4-10 megawatt turbines which are mainly used in Iran.

 

Fuel Supply to Power Plants

 

Jaafari-Nasab said National Iranian Gas Company (NIGC) officials have said that the country’s gas production is expected to increase by 100 mcm/d as new phases of the giant offshore South Pars gas field are expected to come on-stream in the current year.

He said more gas production in the country will lower liquid fuel supply to the power plants.

“By improving the process of fuel supply to power plants, gasoil consumed in the power plants could be exported,” he said. “In winter, power plants shift to consuming liquid fuel due to shortage of natural gas, but they should move to consume natural gas as a clean and low-cost fuel.”

Iran Open to Investment in Petchem Sector

 

The ninth international Iran Plast exhibition was held from September 25 to September 29 with the presence of more than 760 companies from 13 countries.

Iran’s Petroleum Minister Bijan Namdar Zangeneh, Minister of Industry, Mine and Trade Mohammad-Reza Nematzadeh, Managing Director of National Petrochemical Company Abbas Sheri-Moqaddam, senior petrochemical managers, MPs and foreign guests attended the inauguration ceremony held at Tehran International Permanent Fairgrounds.

Zangeneh made a positive assessment of the value of Iran’s petrochemical production over the past 18 months.

He said the value of Iran’s petrochemical products, which stood at $1 billion in 1997, is expected to reach $22 billion this year.

Zangeneh said Iran’s petrochemical industry has witnessed a big jump in recent years, adding that the country is hoped to be able to gain $70 billion in revenues from petrochemical sales by 2025.

“To realize this objective, we need as much investment and if this objective is realized the downstream industries will be developed,” he said.

Zangeneh also said four phases of the giant offshore South Pars gas field are expected to come on-stream by March 2015.

The minister said the country’s gas production capacity will increase by 100 mcm/d this year, and by the same amount next year.

He added that the country’s gas production will be enough for domestic gas supply, as well as feeding petrochemical plants.

Zangeneh said Iran’s neighboring countries have no feedstock to sell investors in the petrochemical sector.

“Iran enjoys the best conditions in terms of amount and price of feedstock in the [Middle East] region,” he said.

 

Polymer Output to Rise

 

Nemtazadeh said the world petrochemical trade stands at $600 billion a year, making up one-fifth of the petroleum industry’s total production.

“Iran has a major plan in this sector and the country’s polymer production will exceed 7 million tons a year in the short-term and with the start-up of new units, including West Ethylene Pipeline,” he said.

Nematzadeh said the downstream industry is open to investment if enough feedstock is provided for further polymer production.

“We have to make a long-term formula for feedstock supply to petrochemical plants so that potential investors would be able to make plans,” he said.

Nematzadeh called on downstream activists to focus on exports so that they would export products of higher value-added rather than propylene.

 

40% Share in Non-Oil Exports

 

Sheri-Moqaddam said petrochemical products account for 40% of Iran’s non-oil exports, adding that this share is forecasted to rise in the near future.

He said Iran’s petrochemical production capacity stands at 60 million tons, 40 million tons of which is currently operational.

“We hope that we will achieve full capacity with the lifting of the sanctions and supply of enough feedstock,” said Sheri-Moqaddam.

He also referred to the growing use of propylene in Iran’s chemical industries and said the production of this substance will create job opportunities in the country.

“Petrochemical industries in Iran consume only 5% of the total hydrocarbon produced in the country, while they produce more than 40 million tons of products,” said Sheri-Moqaddam.

“Currently, more than 30,000 production units depend on petrochemical production in the country. Their raw materials are supplied by petrochemical plants particularly units located in Assaluyeh and Mahshahr. This shows that investment in and development of upstream industries should continue incessantly for the development of downstream petrochemical industries,” said the official.

“Many foreign companies have expressed their willingness for negotiations and investment in Iran’s petrochemical industry,” Sheri-Moqaddam said.

Foreign Firms Focus on Iran Petchem Market

 

The 9^th Iran Plast was different from the previous ones due to Iran’s various advantages like its unique position in petrochemical development, sufficient feedstock and access to high seas. This year, more than 250 foreign companies participated in the exhibition and some countries like Italy, Austria, Turkey, South Korea and India held pavilions.

 

Italians Seek Presence in Iran

 

Italy’s B.G. Plast Impianti S.R.L expressed happiness with its presence in Iran Plast after a seven-year hiatus. The technical director of the Italian company said B.G. Plast is attending Iran Plast to study the market in Iran.

He said seven years of sanctions against Iran have hindered cooperation between B.G. Plast and Iranian companies, adding that they are willing to cooperate with their Iranian clients.

He said a large number of foreign companies from East Asia, mainly China, are present in the exhibition.

Given its big population and its huge oil and gas reserves, Iran enjoys great potentialities, the Italian industrialist said, adding that Iran is totally different from other Middle East countries, notably the [Persian] Gulf Cooperation Council member states.

He expressed hope that his company will be able again to take part at Iran Plast in the coming years.

 

Bright Future for Iran Plastic Industry

 

Representative of the Austrian company said Iranians are willing to benefit from the latest technological achievements in the polymer and plastic industries. Klaus Finke said Iran enjoys high potentialities in polymer and plastic industries. He said his company has been present in Iran for ten years although it has no exclusive agent here.

He said the machinery manufactured by this Austrian company is being sold to Iranian clients.

Regarding terms and conditions for cooperation between the Austrian company and Iranian firms, Finke said activities are focused on the manufacturing of corrugated pipes.

He said he was surprised by the increased number of participants in Iran Plast, compared with the previous years.

Finke said Iranian companies have limited their activities to domestic market and consumers, calling on them to seek footholds in foreign markets. For that purpose, he said, the Iranian companies should boost the quality of their products and expand their communications with foreign markets.

Finke said Iranian plastic industrialists are eager to develop constructive communications with foreign companies and develop new technologies, adding that Iran’s population is young and seeks new business opportunities.

He said he is assured that a bright future is awaiting Iran’s plastic industry.

 

Germans Seek Business in Iran

 

Germany’s Kautex Maschinenbau, which attended the exhibition, has long had cooperation with Iranian companies.

The sales director of the German firm said Iran's petrochemical industries will make significant progress once sanctions against Iran have been lifted.

He said that his company has long been supplying machinery for manufacturing auto parts, including fuelling system, gas tank and gas stations as well as filling machinery used in plastic injection and packaging to Iran's market.

Referring to the German company’s long-term and successful cooperation with its Iranian partner, he said that the firm is represented by SGC in Iran.

He also said that this year’s exhibition is much different from those held in previous years in terms of both quantity and quality.

He said Kautex faces good opportunities in Iran's market because Iran is a major consumer of wind molding technology.

Noting that Iran's petrochemical industry has many capacities for growth, the German businessman said Iranian companies can make significant progress through cooperation with foreign companies and using their machinery and technical savvy.

He said the German company will make efforts to stay in Iran and continue to cooperate with its Iranian partner, adding that Iran and Germany have to find ways for further cooperation.

H noted a much-expected lifting of the sanctions against Iran will provide more opportunities for Iranian and foreign companies to operate in the country.

He said the activities of the German firm have not been much affected by the sanctions.

The German ambassador to Tehran, who was also present in the inauguration of the exhibition, said the growing number of participants in the event indicates its significance at the international level.

 

Iran, India Petchems in Good Terms

 

India's Ambassador to Iran Shri D.P. Srivastava said Indian companies are a major customer of Iranian petchem feedstock and Iranian petrochemical companies have positive interactions with their Indian counterparts.

The Indian diplomat said the showcase is a major event in the petchem industry and is an opportunity for presentation of the latest achievements.

He voiced his country's readiness to cooperate with Iranian petrochemical companies for expansion of the industry in both Asian countries.

In June, the Indian ambassador said New Delhi is planning to expand its petroleum interactions with Tehran.

He said India will maintain its oil purchases from Iran as various Indian companies are planning to buy urea from the country as well.

New Delhi is investing on urea production plant in Iran to satisfy a part of India's need for the product.

 

Iran Plast, Big Petchem Market

 

The massive presence of Iranian and foreign companies in Iran Plast showed the significance of petrochemical industry in the global markets. Iran Plast was held September 25-29 in four divisions – fabricated and semi-fabricated commodities, machinery and equipment, raw materials and services and foreign applicants.

Iran Plast was initially held annually from 2002 to 2006, but it has since been held biennially.

Its timing has been chosen so that it would not coincide with other regional exhibitions like China Plast.

This time, Iran Plast was held under different circumstances because foreign companies, particularly Europeans, were more eager to attend.

The chief organizer of Iran Plast said a record number of foreign companies put their products on exhibit in the event.

Hadi Zonouzi said 760 Iranian and foreign companies from 13 countries were present there.  He said Italy, Austria, Turkey, Taiwan, South Korea, China and India attended in pavilions while Britain, Germany, Spain, Greece, the Netherlands and the United Arab Emirates attended independently.

The space allotted to foreign companies was four times higher than in the previous exhibitions.

Panel discussions were held on the sidelines of the exhibition so that senior managers could exchange views. Austria’s Gesell and Germany’s Düsseldorf companies were represented at Iran Plast.

Producers and consumers of petrochemical raw materials exchanged views in a forum held for this purpose. Three companies from Germany and Austria attended a seminar titled the “Future of Plastic World” with focus on introducing the latest achievements and technologies in the field of plastic injection and polymer machinery.

Another seminar was also held with the theme of “Would you like to live 200 or more years?” to discuss the latest achievements for making human body with polymer materials.

Foreign Firms Focus on Iran Petchem Market

 

The 9^th Iran Plast was different from the previous ones due to Iran’s various advantages like its unique position in petrochemical development, sufficient feedstock and access to high seas. This year, more than 250 foreign companies participated in the exhibition and some countries like Italy, Austria, Turkey, South Korea and India held pavilions.

 

Italians Seek Presence in Iran

 

Italy’s B.G. Plast Impianti S.R.L expressed happiness with its presence in Iran Plast after a seven-year hiatus. The technical director of the Italian company said B.G. Plast is attending Iran Plast to study the market in Iran.

He said seven years of sanctions against Iran have hindered cooperation between B.G. Plast and Iranian companies, adding that they are willing to cooperate with their Iranian clients.

He said a large number of foreign companies from East Asia, mainly China, are present in the exhibition.

Given its big population and its huge oil and gas reserves, Iran enjoys great potentialities, the Italian industrialist said, adding that Iran is totally different from other Middle East countries, notably the [Persian] Gulf Cooperation Council member states.

He expressed hope that his company will be able again to take part at Iran Plast in the coming years.

 

Bright Future for Iran Plastic Industry

 

Representative of the Austrian company said Iranians are willing to benefit from the latest technological achievements in the polymer and plastic industries. Klaus Finke said Iran enjoys high potentialities in polymer and plastic industries. He said his company has been present in Iran for ten years although it has no exclusive agent here.

He said the machinery manufactured by this Austrian company is being sold to Iranian clients.

Regarding terms and conditions for cooperation between the Austrian company and Iranian firms, Finke said activities are focused on the manufacturing of corrugated pipes.

He said he was surprised by the increased number of participants in Iran Plast, compared with the previous years.

Finke said Iranian companies have limited their activities to domestic market and consumers, calling on them to seek footholds in foreign markets. For that purpose, he said, the Iranian companies should boost the quality of their products and expand their communications with foreign markets.

Finke said Iranian plastic industrialists are eager to develop constructive communications with foreign companies and develop new technologies, adding that Iran’s population is young and seeks new business opportunities.

He said he is assured that a bright future is awaiting Iran’s plastic industry.

 

Germans Seek Business in Iran

 

Germany’s Kautex Maschinenbau, which attended the exhibition, has long had cooperation with Iranian companies.

The sales director of the German firm said Iran's petrochemical industries will make significant progress once sanctions against Iran have been lifted.

He said that his company has long been supplying machinery for manufacturing auto parts, including fuelling system, gas tank and gas stations as well as filling machinery used in plastic injection and packaging to Iran's market.

Referring to the German company’s long-term and successful cooperation with its Iranian partner, he said that the firm is represented by SGC in Iran.

He also said that this year’s exhibition is much different from those held in previous years in terms of both quantity and quality.

He said Kautex faces good opportunities in Iran's market because Iran is a major consumer of wind molding technology.

Noting that Iran's petrochemical industry has many capacities for growth, the German businessman said Iranian companies can make significant progress through cooperation with foreign companies and using their machinery and technical savvy.

He said the German company will make efforts to stay in Iran and continue to cooperate with its Iranian partner, adding that Iran and Germany have to find ways for further cooperation.

H noted a much-expected lifting of the sanctions against Iran will provide more opportunities for Iranian and foreign companies to operate in the country.

He said the activities of the German firm have not been much affected by the sanctions.

The German ambassador to Tehran, who was also present in the inauguration of the exhibition, said the growing number of participants in the event indicates its significance at the international level.

 

Iran, India Petchems in Good Terms

 

India's Ambassador to Iran Shri D.P. Srivastava said Indian companies are a major customer of Iranian petchem feedstock and Iranian petrochemical companies have positive interactions with their Indian counterparts.

The Indian diplomat said the showcase is a major event in the petchem industry and is an opportunity for presentation of the latest achievements.

He voiced his country's readiness to cooperate with Iranian petrochemical companies for expansion of the industry in both Asian countries.

In June, the Indian ambassador said New Delhi is planning to expand its petroleum interactions with Tehran.

He said India will maintain its oil purchases from Iran as various Indian companies are planning to buy urea from the country as well.

New Delhi is investing on urea production plant in Iran to satisfy a part of India's need for the product.

 

Iran Plast, Big Petchem Market

 

The massive presence of Iranian and foreign companies in Iran Plast showed the significance of petrochemical industry in the global markets. Iran Plast was held September 25-29 in four divisions – fabricated and semi-fabricated commodities, machinery and equipment, raw materials and services and foreign applicants.

Iran Plast was initially held annually from 2002 to 2006, but it has since been held biennially.

Its timing has been chosen so that it would not coincide with other regional exhibitions like China Plast.

This time, Iran Plast was held under different circumstances because foreign companies, particularly Europeans, were more eager to attend.

The chief organizer of Iran Plast said a record number of foreign companies put their products on exhibit in the event.

Hadi Zonouzi said 760 Iranian and foreign companies from 13 countries were present there.  He said Italy, Austria, Turkey, Taiwan, South Korea, China and India attended in pavilions while Britain, Germany, Spain, Greece, the Netherlands and the United Arab Emirates attended independently.

The space allotted to foreign companies was four times higher than in the previous exhibitions.

Panel discussions were held on the sidelines of the exhibition so that senior managers could exchange views. Austria’s Gesell and Germany’s Düsseldorf companies were represented at Iran Plast.

Producers and consumers of petrochemical raw materials exchanged views in a forum held for this purpose. Three companies from Germany and Austria attended a seminar titled the “Future of Plastic World” with focus on introducing the latest achievements and technologies in the field of plastic injection and polymer machinery.

Another seminar was also held with the theme of “Would you like to live 200 or more years?” to discuss the latest achievements for making human body with polymer materials.

By Zakiye Bahrami, Leila Sadr

Global oil and Asian product market, September

Downward trend continues in crude market, as outlook darkens on global economy

Crude prices fell for the third consecutive month in September. There were a combination of factors shaping the prices. Ample supply and weak demand were eroding prices.

The world’s appetite for crude oil slowed at a “remarkable” pace during the second quarter because of weak economic growth in Europe and China, prompting the International Energy Agency to revise lower its oil demand forecasts for 2014 and 2015.

The OECD revised down its forecasts for 2014 growth for all large economies except India. It expects growth of 2.1 per cent in the US, 0.8 per cent in the eurozone and 0.9 per cent for Japan, downward revisions in each economy between 0.3 and 0.5 percentage points. China’s forecast is constant at 7.4 per cent growth, with the UK the fastest growing advanced economy at 3.1 per cent. Brazil is bottom of the league with only 0.3 per cent growth expected this year, much lower than the 1.8 per cent expected in May.

On the supply side, higher OPEC production came at a time of lower oil prices and slowing demand growth. OPEC production rose in August duo to the extra output from Libya, Angola, Nigeria and Algeria. Lower production from Saudi Arabia and Iraq partly offset the rise by African members. But OPEC production was still the highest since August last year.

 

According to state-owned NOC, Libyan crude production has risen, boosting supplies of light sweet crude in Mediterranean market in late August. Libyan production has risen to 665,000 b/d at the end of August. Exports were 550,000 b/d in August and 230,000 b/d in July. During August, Brent prices fell sharply in comparison to Dubai prices. This was due to plentiful supplies in the region and caused the prices to go closer to Dubai prices. As a result, Asia took more from West African crude in August, at the expense of Persian Gulf shipments.  Therefore, Dubai and Brent prices widened again in September (see graph 1).

Asian Product Markets

In Singapore products market- leader product market in Asia- the mean of most products prices, decreased in line with the fall of crude prices (see graph 2). Although crude prices decreased highly, Asian gasoline prices rose slightly and it was mostly due to the strong gasoline market performance.

Some of the changes in product prices are because of crude price changes. Hence, in order to investigate product market fundamental and its performance, it is necessary to look at product price changes in comparison with crude price changes. Of the light distillates, naphtha and gasoline improved over September after weakness in August. These two products prices gained against crude. Moreover, jet fuel and gasoil prices were performing stronger for second consecutive month. Similarly in pattern, fuel oil market gained against crude for second month in September (see graph 3).

Products market fundamentals in brief

September 2014	Light Distillates Products		Middle Distillates Products		Heavy Products
	gasoline	Naphtha	Gasoil	Jet Fuel	Fuel Oil 180	Fuel Oil 180
	↑	↑	↑	↑	↑	↑

(Upward arrow: strength, downward arrow: weakness)

 

Light Distillates (gasoline, naphtha)

On Top of barrel, the gasoline margins over crude increased and reached into its highest levels during last weeks of September following declines in August. It was as a result of falling global crude value, lower supply and strong September demand from Middle East buyers like Kuwait, Abu Dhabi, Saudi Arabia and Pakistan in Asia. In the meantime, Firm and strong fundamentals in Asia, Northwest Europe and the Mediterranean market after the seasonal refinery maintenance season provided some support in the market too. In the Middle East a planned maintenance of a condensate splitter at Abu Dhabi’s Ruwais oil refinery with capacity of 400,000 barrels per day is likely to increase gasoline demand of ADNOC during September and October. Also recent outage at the Petronas Melaka refinery in Malaysia and Pertamina’s plan for shutdown of 230,000 b/d crude distillation unit at its 348,000 b/d Cilacap refinery in Indonesia for 35 days has improved fundamentals of the market too. On the demand side, Vietnam increased its demand and Indonesian Pertamina is going to import 9.4 million barrels for October. Increase in demand of Australia strengthened the market too. Besides, Pakistan State Oil is also in the market seeking to buy 350,000 mt of 87 RON gasoline in four 50,000 mt cargoes for loading over October and November. Moreover according to IEA’s report more production of light tight oil in USA is likely to change refinery yields there and accordingly gasoline output will may increase. As a result, gasoline import of US declined during last year. Besides, Refiners are currently switching to make winter-grade gasoline. It has more volatility than summer-grade gasoline and less limitation for evaporative emissions that normally increase with warm weather. Volatility is a measure of how easily a liquid will change into a vapor. For gasoline, it is measured by Reid Vapor Pressure (RVP).The higher the RVP, the more volatile the gasoline. On the other hand, new refineries in Saudi Arabia and UAE are increasing supply in the Persian Gulf region and it will change trade flow of this product. In general, Asian gasoline market sentiment was strong by expected tight supply and firm demand.

The Asian naphtha margin over crude increased during September by recent declines in crude price. In fact heavy cracker maintenances during this month reduced demand for naphtha. In the meantime it is expected for demand of this product to increase marginally by petrochemical demands during next months in Middle East. In addition, there are some buying supports from gasoline blending pools in northwest Europe. On supply side, the market is over supplied while it is economic for LPG to replace naphtha as feedstock.  Truly the main alternative feedstock to naphtha in North Asian steam crackers is butane.  Additionally estimated arbitrage volume of naphtha pressured on its Asian value but it is expected that refinery turnarounds in Europe reduce its effect.

 

Middle Distillates (gasoil, jet fuel)

Singapore gasoil and jet fuel crack – differential between product and Dubai crude prices- rose in September. Singapore middle distillates inventories fell during this month.

During the reporting month, Jet fuel gained slitghly against gasoil in Singapore market. Jet fuel market was strong against August levels. Firm spot demand was seen out of Indonesia. The move was likely related to stock-building ahead of increased demand, as pilgrims head to Saudi Arabia for Haj in October, as well as two refineries offline for maintenance having reduced domestic supply. In addition, Persian Gulf jet fuel buying continued to rise on the back of rising aviation demand to cater to continuing outbound tourism flows from the region to escape the summer heat. The Eid al-adha holidays in early October are likely to increase passenger volumes in October and boost jet fuel demand.

Falling inventories in Singapore and Japanese demand for kerosene for heating during the approaching winter have increased the call on stocks from west coast India, which could tighten inventories available for Persian Gulf.   It should be noted that, Japan usually rose the production of kerosene at expense of jet fuel production.                                                                                      

Fuel Oil

Asian Fuel oil market in both grades- 180 & 380 cst- strengthened for second consecutive month in September. Fuel oil gained against crude to the highest level since June 2013. It was mostly due to tightening supplies and steady bunker demand in the region. Healthy trading activity was leading to the high demand of fuel oil as bunker in Singapore market. Moreover, delays of fuel oil arrivals  from Europe into Singapore kept the Singapore market in upward position. Looking at European fuel oil market, bunker fuel demand was firming and supplies have tightened in northwest Europe. A string of export bookings from Europe to Singapore have supported the market.

Heavy fuel oil is the bunker choice for global marine shipping industry. However, OPEC notes in its latest bulletin that LNG will increasingly be deployed as a bunker fuel in an effort to reduce shipping carbon emissions by 20% by the end of the decade.

 

 

Mexico Eyeing $50billion of Private Investment

 

Mexico

Mexican energy minister expects US$50 billion of private investment in the energy sector between 2015 and 2018.

Mexico’s Energy secretary, Pedro Joaquin Coldwell, assured the international market that country's newly privatized industry is expecting approximately US$50 billion in investments in the national energy sector between 2015 and 2018.

The Boston Consulting Group, a global management consulting firm, together with  a research and advisory company based in Mexico City, released a report in April encouraging investors to look forward to partnering with Pemex now that the reforms are in place.

It urges companies to begin exploring and produce oil, building refineries, constructing pipelines, and developing natural-gas distribution networks.

The consulting firms also invite investors to participate in Mexico’s  power industry, in the generation, transmission, and distribution sectors. “Although commercial and economic impacts may not be fully evident until 2016, these reforms will grant a first-mover advantage to those who can mobilize quickly,” the report said.

 

NZ Oil & Gas Annual Profit Falls 61%

 

 New Zealand

New Zealand Oil & Gas, which has interests in the Tui and Kupe fields, posted a 61 percent drop in annual profit, reflecting a "sharp" increase in exploration costs and some foreign exchange losses on its US dollar holdings.

Profit dropped to $10.1 million, or 2.4 cents a share, in the 12 months ended June 30, from $25.9 million, or 6.5 cents, a year earlier, the Wellington-based company said in a statement. Revenue rose 4 percent to $103.6 million.

The oil and gas explorer said its exploration and evaluation investment costs surged 77 percent to $75 million from the previous year and is expected to continue at around US$35 million a year. Earlier this year the company said it had found no significant gas or oil shows in its Matuku well near Taranaki. It continues to build its portfolio, with four new exploration permits awarded last year, two in New Zealand deep water and two in Indonesia.

NZOG said it is finalising a development plan for the Kisaran wells in onshore Sumatra, Indonesia, with a final investment decision expected before the end of 2014.

 

 

Angola Average Oil Output at 6 mb/d

    Angola

 The daily average production of oil barrels in the country stands at 1.6 million, at a time the international crude oil market records a price of around USD 98.0.

This was said to the press at the end of the meeting of the Commission for Real Economy of the Cabinet Council by the Oil Minister José Maria Botelho de Vasconcelos.

The minister said that the downward trend in the price of the country's main product of importing country has been happening since August of this year.

"There is actually this trend, but we know that the market records in recent months, basically since August, a negative reversal in price", he stressed.

He noted that projections indicate that by December the price per barrel at the international market will remain at around USD 98.

High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article.

 

Saudi Arabia Cuts Oil Output in August

Saudi Arabia

Saudi Arabia, the world’s biggest oil exporter, has slashed its production of crude in an apparent attempt to prevent the price falling further below $100 per barrel.

The kingdom, which has the capacity to pump 12.5m barrels per day (bpd) of crude at full choke, trimmed 400,000 bpd from its output last month as prices began to weaken, according to a monthly market report issued by the Organization of Petroleum Exporting Countries (OPEC). That is equal to about half the UK’s total oil output at present levels.

Saudi is considered to be the world’s swing producer because it accounts for about 10pc of global demand. The country has acted on several occasions either to pump more oil into the market to ease price pressures, or cut back to maintain prices at levels around $100.

 

Russia, China to Sign New Gas Deal

Russia

Russia plans to sign a 30-year gas supply contract with China via the western route, Russian energy giant Gazprom’s CEO Alexei Miller told President Vladimir Putin. The route to supply gas to China via western Siberia may be implemented faster than the eastern route, through which Moscow has agreed to ship the fuel to its Asian neighbor in May.

“Gazprom plans to sign a contract to supply China with 30 billion cubic meters of natural gas via western route over thirty years,” Miller said.

The China-Russia West Route natural gas pipeline project connects gas deposits in Western Siberia and the northwestern part of China via Russia’s Altai region, securing the world’s top energy user a major source of cleaner fuel.

The potential of this route is “enormous”, the Gazprom CEO told the Russian President.

“It is even greater than in Eastern Siberia and, without a doubt, we can increase the volume of gas supplies very quickly via the western route, depending on the growth in demand in the Chinese market,” said Miller.

Gazprom is to sign the 30-year contract with China National Petroleum Corporation (CNPC) in November. The deal will directly link Russia’s huge gas fields to Asia’s booming market for the first time.

 

 

 

 

Sanctions-Stricken Russia Getting Closer to OPEC

 

The world’s largest crude producer, Russia, is warming up to Organization of the Petroleum Exporting Countries (OPEC) — finally.

Russian Energy Minister Alexander Novak recently called on OPEC Secretary General Abdullah Al-Badri and other officials in Vienna.

Although the annual meeting between Russia, the world’s largest producer and OPEC representing exporters controlling some 40 per cent of the global oil market, was planned much in advance, yet the timing and the significance of the meeting was not lost upon pundits.

Russia has been reluctant to publicly coordinate moves with other producers. And though there has been no official acknowledgement of any such possibility, yet a Reuters report quoting Russian government officials did indicate that “the talk (within the Russian energy ministry) of closer cooperation with OPEC on prices have long been there.”

Russia has had a bumpy relationship with OPEC. In fact Moscow has been striving to increase its markets share — at the expense of OPEC. Political developments, concerning Syria and Iran, also did not help bringing the two closer.

But a change of heart seems in offing, as sanctions, imposed by the United States and European Union after the annexation of Ukraine in March and tightened since then over Moscow’s support to separatists, is appearing to bite.

Russian economic growth is ebbing fast and is expected to be just 0.4pc at best this year, with recession a possibility, if the West takes more measures against Moscow.

Russia’s currency too has fallen to a historic low against the dollar — jacking up the price Russians must pay for many imports, from vegetables to luxury goods.

Russian budget projects that the economic fallout of the sanctions will result in a revenue shortfall of nearly two trillion rubles ($52 billion) over the next two years.

Russian reliance on its oil exports is well known. Hydrocarbon exports revenues account for almost 50pc of its budget. Already squeezed by Western sanctions over Ukraine and balanced on the edge of recession, melting crude markets and the growing squeeze on oil revenues is adding another dimension to Russian woes.

 

 

Pennsylvania Fines Shale Gas Driller $4.15m

 

Oil and gas producer Range Resources has been fined more than $4 million for environmental violations in Pennsylvania, state environmental authorities said, the largest fine leveled against a shale gas operator in the state.

Range Resources must pay $4.15 million to settle violations at six impoundments, or holding ponds, in Pennsylvania's Washington County, the local Department of Environmental Protection (DEP) said in a statement. The company must shut down some sites and do repair and upgrade work at others.

The charges against Range Resources included improper monitoring of leaks from a wastewater containment pond as well as releases of contaminants, such as leaking flowback, that has affected soil and groundwater.

There had been no impact as yet on drinking water from any of the affected impoundments, the DEP said.

The biggest US shale gas field, Marcellus, runs through Pennsylvania. Marcellus, which produces a fifth of the country's natural gas, is at the heart of the shale gas revolution, where a combination of hydraulic fracturing, or fracking, and horizontal drilling technologies have brought massive volumes of gas inexpensively out of once-ignored fields.

Pennsylvania has also been pursuing a criminal case against Exxon Mobil's XTL subsidiary on charges of illegally releasing fracking water into the environment.

State DEP Secretary E. Christopher Abruzzo described the fine against Range Resources as "the largest against an oil and gas operator in the state's shale drilling era".

"This action reaffirms the administration's unwavering commitment to protecting Pennsylvania's soil and water resources," Abruzzo said.

He said Range Resources had signed a consent order and agreement on the fine and remedial work with the DEP that "establishes a new, higher benchmark for companies to meet when designing future impoundments" in Pennsylvania.

The consent order stipulates among other things that Range Resources start immediate soil and groundwater investigations at each of the closed impoundments to determine what, if any, impact they have had.

If contamination is found, the company must do remedial work.

 

 

Sergipe Oil Find to Require Expanded Output Plan

 

 

A giant oil and gas discovery off the coast of Brazil's Sergipe state holds enough hydrocarbons for state-run Petrobras and its Indian partners to build an expensive undersea natural-gas pipeline and expand development beyond two scheduled production ships, a company official said.

Petrobras, formally known as Petroleo Brasileiro SA , has said it expects to install a 100,000-barrel-a-day floating production, storage and offloading (FPSO) ship in the area in 2018 and another in 2020. Petrobras expects to take bids to build the first FPSO in November.

"These discoveries will require various other production systems but we have planned two so far," Claudio Madeira, geological interpretation manager for Petrobras, said at an industry event in Rio de Janeiro. "A gas pipeline will be built for this area."

The pipeline is needed to carry natural gas to shore from the from the FPSOs, he said. Oil will be loaded direct from the FPSOs to tankers.

A growing number of analysts as well as Sergipe state officials have criticized what they believe are delays in developing the discovery. Sergipe holds higher-grade oil in less technically demanding reservoirs than those near Rio de Janeiro, which have received the bulk of Petrobras' recent investment but are years behind schedule.

While Madeira said Petrobras is still evaluating how much oil and gas has been found in the area's wells, some as far as 300 kilometers (186 miles) from the country's northeastern Atlantic coast, government and industry officials told Reuters a year ago they contain at least 1 billion barrels of recoverable oil.

That's enough to meet all the needs in the United States, the world's largest oil consumer, for nearly two months. It's also enough to make Sergipe Brazil's the biggest new oil region since the 2007 announcement of the subsalt, a series of giant reserves near Rio de Janeiro trapped deep beneath the seabed by a layer of mineral salts.

The discoveries are in three adjacent blocks, one owned by Petrobras alone, a second by Petrobras and India's Oil and Natural Gas Corp and a third by Petrobras and IBV Brasil SA, a joint venture between India's Videocon Industries Ltd and Bharat Petroleum Corp.

 

Pertamina Launches Locally Made Oil Rig

 

Indonesia’s state-owned oil and gas company PT Pertamina inaugurated a drilling rig built in Batam for use in oil exploration projects in Algeria, to ease dependency on energy imports.

The rig, which was produced by PT Citra Tubindo Engineering (CTE), was designed in February and will be given to Pertamina’s drilling subsidiary PT Pertamina Drilling Service Indonesia (PDSI) in October for use in the company’s oil fields in Algeria.

Pertamina said that the US$26 million rig was 10 percent less expensive than the imported oil rigs that the firm used.

The firm’s upstream operation director, Muhammad Husen, said that the Batam-made oil rig was the first step toward Indonesia’s independence in using domestically made rigs.

“Indonesia has not been confident in producing its own oil rigs, but that needs to change. This rig proves that we can prosper with self-built equipment,” Husen told The Jakarta Post.

The Algerian-bound rig is the company’s third built by PT CTE, following two others built for Pertamina’s operations in Cepu, East Java.

“The two rigs in Cepu manage to cut about 400 days from the required working days. We believe that CTE’s third rig will produce the same positive results,” he added.

Meanwhile, PDSI chief director Faried Rudiono said that the subsidiary currently operated 42 oil rigs for oil exploration projects in the country, which is still far less than the company’s target of operating 200 rigs by 2018.

Furthermore, CTE chief director Kris Wiluan explained that his company’s oil rigs served as a solution toward the usual government spending for imported oil production equipment, which could reach up to $15 billion a year.

 

 

Keystone XL Costs to Nearly Double

 

The total cost of TransCanada Corp's controversial Keystone XL pipeline is likely to nearly double following six years of regulatory delays, a company spokesman said.

TransCanada spokesman Shawn Howard confirmed comments made by chief executive officer Russ Girling during an interview in Washington, D.C. The comments were first reported by The Wall Street Journal.

In an email, Howard said Girling had said the cost of the pipeline, previously estimated at $5.4 billion, had risen significantly. The CEO also indicated that the new estimate in the billions "gets you into the high single-digits to a 10 number," the spokesman wrote.

The project to build the 1,179 mile (1,900-km) pipeline to carry 830,000 barrels per day of Canadian crude from Alberta's oil sands to the Gulf Coast, is in its sixth year of waiting for a US permit after running into fierce environmental opposition.

The increased costs were the result of a protracted regulatory process, inflation, fluctuating currency rates, labour contracts, materials storage and additional conditions put into place for the pipeline, the spokesman said.

"It is worth noting that increased project costs mean higher costs for refiners and consumers - and those costs will likely be passed on to all of us as consumers," Howard said.

Confirmation of higher Keystone XL costs came as Reuters reported a number of US hedge funds were reviewing the pipeline operator as a potential break-up candidate.

 

NOVATEK Seeks Budget for LNG Project

 

NOVATEK has applied for 100 billion roubles ($3.8 billion) from the National Wellbeing Fund for the Yamal-LNG project, Deputy Minister of Economic Development Nikolai Podguzov said.

Under the Yamal LNG project, the company will build a liquefied natural gas plant with the capacity of 16.5 billion tonnes a year. The first line is due in 2017. The proven and probable deposits in the field are estimated at 907 bcm. The project includes organization of the infrastructures, which will include a sea port and an airport.

NOVATEK and its partners - Total and CNPC - have invested in the project 5.8 billion dollars as of July 31, 2014. NOVATEK’s Financial Director Mark Jetway said 95% of LNG in the project had been contracted already, and the site for the plant was ready by 75% Yamal-LNG’s shareholders will invest before the yearend another two billion dollars, NOVATEK’s CEO Leonid Mikhelson said.

Realities of US Condensate Exports

 

Last June, the Obama administration cleared the way for exports of the first unrefined American oil  cargo in nearly four decades, allowing energy companies to start chipping away at the longtime ban on selling US oil abroad.

In separate rulings that haven't been announced, the Commerce Department gave Pioneer Natural Resources Co. and Enterprise Products Partners LP permission to ship a type of ultra-light oil known as condensate to foreign buyers. The buyers could turn the oil into gasoline, jet fuel and diesel.

The shipments could begin as soon as August and are likely to be small, people familiar with the matter said. It isn't clear how much oil the two companies are allowed to export under the rulings, which were issued since the start of this year. The Commerce Department's Bureau of Industry and Security approved the moves using a process known as a private ruling.

For now, the rulings apply narrowly to the two companies, which said they sought permission to export processed condensate from south Texas' Eagle Ford Shale formation. The government's approval is likely to encourage similar requests from other companies, and the Commerce Department is working on industry-wide guidelines that could make it even easier for companies to sell US oil abroad.

 

Background

 

Under rules imposed after the Arab oil embargo of the 1970s, US companies can export refined oil products such as gasoline and diesel but not oil itself, except in limited circumstances that require a special license. The embargo essentially excludes Canada, where US oil can flow with a special permit.

Lawmakers enacted the ban after Arab countries declared an embargo on shipments to Western nations because of their support for Zionist Regime in the Yom Kippur War. The embargo caused oil prices to quadruple and led to rationing at gas stations across the US.

The private rulings by the Commerce Department define some ultra-light oil as fuel after it has been minimally processed, making the oil eligible for sale outside the US. The Brookings Institution estimates that as much as 700,000 barrels of ultra-light oil per day could be exported starting next year.

Eventually, the exemption could grow to a substantial portion of the three million barrels a day of oil that energy companies are pumping from shale, industry experts say. From 2011 to 2013, US oil output soared by 1.8 million barrels a day, with 96% of new production in the form of light or ultra-light oil, according to the Energy Information Administration.

In 2008, the average API for the crude oil delivered to refineries in the US was 30.2 which reached 30.8 in 2013with more production of light crude oil. The average refining activities soared from 86.2% in 2012 to 88.3% in 2013. But despite these changes and developments, crude and sweet crude oil production is growing faster than demand. The US is facing crude and sweet crude oversupply which has caused sharp fall in the prices.

Some executive and legislative officials recommend resolving this problem by relaxing crude oil export restrictions. In their view, lifting the ban on ultra-light and sweet crude oil produced in Texas and North Dakota would strike a balance in the market. Eagle Ford in the Gulf Coast enjoys a high position in terms of producing sweet and ultra-light crude.

About 35% of crude production in the Eagle Ford in 2011 was from crude with an API above 50, a percentage which is forecasted to drop to about 15% in 2015. Meanwhile, crude with an API between 40 and 50 is forecasted to climb from 45% in 2011 to 65% in 2015 of Eagle Ford production.

Similarly, in the Niobrara, crudes with an API above 50, which made up 40% of the region's total crude production in 2011, will fall to 30% in 2011. At the same time, crudes with an API between 40 and 50 will climb from 30% to 50% of the total.   

The growth of light, sweet crude production has largely contributed to a reduction in crude oil imports, which fell by 1.5 million b/d between 2011 and 2013, about 50% of which was light crude. This caused the average API gravity of crude runs at US refineries to increase from 30.2 degrees in 2008 to 30.8 degrees in 2013.

US refiners face little difficulty modifying their facilities to process more light crude and could increase throughput to 12 million-13 million b/d.

 

Flipside of the Coin

 

The US’s authorization for the export of unrefined oil is only a misunderstanding resulting from unclear definition for gas condensate and its distinction from crude oil.  The US Commerce Department defines crude oil as a “mixture of hydrocarbons that exists in liquid phase in natural underground reservoirs and remains liquid at atmospheric pressure after passing through surface separating facilities.|

Small amounts of hydrocarbons that exist in gaseous phase in natural underground reservoirs but are liquid at atmospheric pressure after being recovered from oil well (casing head) gas in lease separators are subsequently commingled with the crude stream without being separately measured. Lease condensate recovered as a liquid from natural gas wells in lease or field separation facilities and later mixed into the crude stream are also included; small amounts of non-hydrocarbons produced with the oil, such as sulfur and various metals; drip gases, and liquid hydrocarbons produced from tar sands, gilsonite, and oil shale. Liquids produced at natural gas processing plants are excluded. Crude oil is refined to produce a wide array of petroleum products, including heating oil; gasoline, diesel and jet fuels; lubricants; asphalt; ethane, propane, and butane; and many other products used for their energy or chemical content.

Lease condensate is a “mixture consisting primarily of pentanes and heavier hydrocarbons which is recovered as a liquid from natural gas in lease separation facilities.”

This category excludes natural gas plant liquids, such as butane and propane, which are recovered at downstream natural gas processing plants or facilities.

Sharp increase in the shale oil and condensate production in the US over the past three years pushed American petroleum industrialists to demand a more clear definition of refined oil. Such challenges have been frequently discussed behind closed doors.

The US’s authorization of refined oil export is in fact a new interpretation of crude oil.

Some producers of this category of crude oil and the Senators supporting them have sought to oblige the Commerce Department to redefine “crude oil” so that “condensate” would not be included. This way, ultra-light crude oil will be no longer categorized as crude oil and its export will be authorized without having to pass any new Acts.   

The U.S. has become an energy powerhouse, with crude oil production leaping some 48 percent in the last few years. New technology is tapping oil-bearing shale formations in states such as North Dakota and Texas. Most of this product is light oil, which does not require heavy refining. Some of the most advanced refineries in the world are along the Gulf Coast, but that is actually a problem. Their owners invested in expensive facilities suited to refining heavier crude, so there is a mismatch between the refining infrastructure and the type of crude flowing from US wells. In the deeply interconnected global oil market, in which borders matter less than many people think, the obvious solution is to allow oil companies to ship the light crude to refineries suited for processing it, supporting US profits and US jobs in the process, and to tolerate imports of crude oil that US refineries can handle.

Under the private rulings, condensate can qualify as a refined product suitable for export so long as the liquid is stabilized and distilled, according to officials and industry executives.

Stabilization, a process that heats up oil to boil off some of the most volatile gases, has long been an early step in energy production, transportation and refining. Equipment to stabilize oil is common in energy states like Texas. Distillation is an increased step, industry sources said, but far short of refining or turning condensate into finished fuels.

US oil and gas company Marathon Oil Corp is pursuing all ways to export the condensate it produces in places including the Eagle Ford in South Texas.

"We are pursuing every avenue available to us to take advantage of the current regulatory environment to ensure we have the option to get our barrels, particularly condensate, out in the markets," Chief Executive Lee Tillman said recently.

The executive stopped short of saying that Marathon Oil had sought approval from the US Department of Commerce to export the very light form of crude oil with minimal processing.

 

Consequences

 

A new definition of condensate may be a technical and legal issue, but it will leave important impacts on investment in oil and trading of oil and oil products that can help reduce the difference in the price of West Texas Intermediate (WTI) and Brent crude oils.

As many as 500,000 barrels of light oil a day may be eligible for export under the new government classification, helping to soak up surging the United States shale oil production.

The US crude production has boomed in recent years, spurred by horizontal drilling and hydraulic fracturing in shale plays. Output has risen 46 per cent since the start of 2012 to nearly 8.5 million barrels a day.

Investors who regarded increased ultra-light and sweet crude production as an opportunity for building splitters are now scared that their profitability may be in danger. That is why they are sharply criticizing US policymakers and try to make the US government sensitive about the consequences of such hasty actions.

The news is important for condensate exporters including Iran, Qatar and Australia because the prices would be pressured at least in the short-term. But the point is that two splitters with a total capacity of 245,000 barrels are to be launched in South Korea and one with a capacity of 110,000 barrels in Singapore this year.

Next year, a 145,000-barrel plant will come on-stream in Qatar while a 120,000-barerel refinery is expected to become operational in Iran. Therefore, demand for gas condensate is rising rapidly in this region.

Moreover, the gas condensate produced in Australia, Iran and Qatar is much lighter than the ultra-light crude oil produced in the US and they are better for feeding splitters.    

 

 

Realities of US Condensate Exports

 

Last June, the Obama administration cleared the way for exports of the first unrefined American oil  cargo in nearly four decades, allowing energy companies to start chipping away at the longtime ban on selling US oil abroad.

In separate rulings that haven't been announced, the Commerce Department gave Pioneer Natural Resources Co. and Enterprise Products Partners LP permission to ship a type of ultra-light oil known as condensate to foreign buyers. The buyers could turn the oil into gasoline, jet fuel and diesel.

The shipments could begin as soon as August and are likely to be small, people familiar with the matter said. It isn't clear how much oil the two companies are allowed to export under the rulings, which were issued since the start of this year. The Commerce Department's Bureau of Industry and Security approved the moves using a process known as a private ruling.

For now, the rulings apply narrowly to the two companies, which said they sought permission to export processed condensate from south Texas' Eagle Ford Shale formation. The government's approval is likely to encourage similar requests from other companies, and the Commerce Department is working on industry-wide guidelines that could make it even easier for companies to sell US oil abroad.

 

Background

 

Under rules imposed after the Arab oil embargo of the 1970s, US companies can export refined oil products such as gasoline and diesel but not oil itself, except in limited circumstances that require a special license. The embargo essentially excludes Canada, where US oil can flow with a special permit.

Lawmakers enacted the ban after Arab countries declared an embargo on shipments to Western nations because of their support for Zionist Regime in the Yom Kippur War. The embargo caused oil prices to quadruple and led to rationing at gas stations across the US.

The private rulings by the Commerce Department define some ultra-light oil as fuel after it has been minimally processed, making the oil eligible for sale outside the US. The Brookings Institution estimates that as much as 700,000 barrels of ultra-light oil per day could be exported starting next year.

Eventually, the exemption could grow to a substantial portion of the three million barrels a day of oil that energy companies are pumping from shale, industry experts say. From 2011 to 2013, US oil output soared by 1.8 million barrels a day, with 96% of new production in the form of light or ultra-light oil, according to the Energy Information Administration.

In 2008, the average API for the crude oil delivered to refineries in the US was 30.2 which reached 30.8 in 2013with more production of light crude oil. The average refining activities soared from 86.2% in 2012 to 88.3% in 2013. But despite these changes and developments, crude and sweet crude oil production is growing faster than demand. The US is facing crude and sweet crude oversupply which has caused sharp fall in the prices.

Some executive and legislative officials recommend resolving this problem by relaxing crude oil export restrictions. In their view, lifting the ban on ultra-light and sweet crude oil produced in Texas and North Dakota would strike a balance in the market. Eagle Ford in the Gulf Coast enjoys a high position in terms of producing sweet and ultra-light crude.

About 35% of crude production in the Eagle Ford in 2011 was from crude with an API above 50, a percentage which is forecasted to drop to about 15% in 2015. Meanwhile, crude with an API between 40 and 50 is forecasted to climb from 45% in 2011 to 65% in 2015 of Eagle Ford production.

Similarly, in the Niobrara, crudes with an API above 50, which made up 40% of the region's total crude production in 2011, will fall to 30% in 2011. At the same time, crudes with an API between 40 and 50 will climb from 30% to 50% of the total.   

The growth of light, sweet crude production has largely contributed to a reduction in crude oil imports, which fell by 1.5 million b/d between 2011 and 2013, about 50% of which was light crude. This caused the average API gravity of crude runs at US refineries to increase from 30.2 degrees in 2008 to 30.8 degrees in 2013.

US refiners face little difficulty modifying their facilities to process more light crude and could increase throughput to 12 million-13 million b/d.

 

Flipside of the Coin

 

The US’s authorization for the export of unrefined oil is only a misunderstanding resulting from unclear definition for gas condensate and its distinction from crude oil.  The US Commerce Department defines crude oil as a “mixture of hydrocarbons that exists in liquid phase in natural underground reservoirs and remains liquid at atmospheric pressure after passing through surface separating facilities.|

Small amounts of hydrocarbons that exist in gaseous phase in natural underground reservoirs but are liquid at atmospheric pressure after being recovered from oil well (casing head) gas in lease separators are subsequently commingled with the crude stream without being separately measured. Lease condensate recovered as a liquid from natural gas wells in lease or field separation facilities and later mixed into the crude stream are also included; small amounts of non-hydrocarbons produced with the oil, such as sulfur and various metals; drip gases, and liquid hydrocarbons produced from tar sands, gilsonite, and oil shale. Liquids produced at natural gas processing plants are excluded. Crude oil is refined to produce a wide array of petroleum products, including heating oil; gasoline, diesel and jet fuels; lubricants; asphalt; ethane, propane, and butane; and many other products used for their energy or chemical content.

Lease condensate is a “mixture consisting primarily of pentanes and heavier hydrocarbons which is recovered as a liquid from natural gas in lease separation facilities.”

This category excludes natural gas plant liquids, such as butane and propane, which are recovered at downstream natural gas processing plants or facilities.

Sharp increase in the shale oil and condensate production in the US over the past three years pushed American petroleum industrialists to demand a more clear definition of refined oil. Such challenges have been frequently discussed behind closed doors.

The US’s authorization of refined oil export is in fact a new interpretation of crude oil.

Some producers of this category of crude oil and the Senators supporting them have sought to oblige the Commerce Department to redefine “crude oil” so that “condensate” would not be included. This way, ultra-light crude oil will be no longer categorized as crude oil and its export will be authorized without having to pass any new Acts.   

The U.S. has become an energy powerhouse, with crude oil production leaping some 48 percent in the last few years. New technology is tapping oil-bearing shale formations in states such as North Dakota and Texas. Most of this product is light oil, which does not require heavy refining. Some of the most advanced refineries in the world are along the Gulf Coast, but that is actually a problem. Their owners invested in expensive facilities suited to refining heavier crude, so there is a mismatch between the refining infrastructure and the type of crude flowing from US wells. In the deeply interconnected global oil market, in which borders matter less than many people think, the obvious solution is to allow oil companies to ship the light crude to refineries suited for processing it, supporting US profits and US jobs in the process, and to tolerate imports of crude oil that US refineries can handle.

Under the private rulings, condensate can qualify as a refined product suitable for export so long as the liquid is stabilized and distilled, according to officials and industry executives.

Stabilization, a process that heats up oil to boil off some of the most volatile gases, has long been an early step in energy production, transportation and refining. Equipment to stabilize oil is common in energy states like Texas. Distillation is an increased step, industry sources said, but far short of refining or turning condensate into finished fuels.

US oil and gas company Marathon Oil Corp is pursuing all ways to export the condensate it produces in places including the Eagle Ford in South Texas.

"We are pursuing every avenue available to us to take advantage of the current regulatory environment to ensure we have the option to get our barrels, particularly condensate, out in the markets," Chief Executive Lee Tillman said recently.

The executive stopped short of saying that Marathon Oil had sought approval from the US Department of Commerce to export the very light form of crude oil with minimal processing.

 

Consequences

 

A new definition of condensate may be a technical and legal issue, but it will leave important impacts on investment in oil and trading of oil and oil products that can help reduce the difference in the price of West Texas Intermediate (WTI) and Brent crude oils.

As many as 500,000 barrels of light oil a day may be eligible for export under the new government classification, helping to soak up surging the United States shale oil production.

The US crude production has boomed in recent years, spurred by horizontal drilling and hydraulic fracturing in shale plays. Output has risen 46 per cent since the start of 2012 to nearly 8.5 million barrels a day.

Investors who regarded increased ultra-light and sweet crude production as an opportunity for building splitters are now scared that their profitability may be in danger. That is why they are sharply criticizing US policymakers and try to make the US government sensitive about the consequences of such hasty actions.

The news is important for condensate exporters including Iran, Qatar and Australia because the prices would be pressured at least in the short-term. But the point is that two splitters with a total capacity of 245,000 barrels are to be launched in South Korea and one with a capacity of 110,000 barrels in Singapore this year.

Next year, a 145,000-barrel plant will come on-stream in Qatar while a 120,000-barerel refinery is expected to become operational in Iran. Therefore, demand for gas condensate is rising rapidly in this region.

Moreover, the gas condensate produced in Australia, Iran and Qatar is much lighter than the ultra-light crude oil produced in the US and they are better for feeding splitters.    

 

 

Iran-Russia Axis of Energy

 

By Shuaib Bahman

 

Introduction

 

The relations between Iran and Russia following the collapse of the Union of Soviet Socialist Republics (USSR) could not be reviewed without taking into consideration the role of energy.

The effect of energy on the behavior of both Iran and Russia has been growing. The issue of energy has caused regional and international challenges for both countries. For example, energy deals which have been reached under US influence in recent years on energy transfer routes in the region are such that they would avoid the development of Iran-Russia ties in the energy sector.

Iran and Russia have undertaken extensive efforts in recent years to broaden their relations in the energy sector. For example, Russia built a nuclear power plant for Iran and Russian companies have invested in Iran’s oil and gas projects.

 

Energy Cooperation

 

In 2007, Russia’s Gazprom announced its intention to develop two or three phases of the giant South Pars gas field. The Russian gas company also announced that it was willing to invest in Iran’s oil sector, too. To that effect, Gazprom Neft and National Iranian Oil Company (NIOC) signed a heads of agreement in November 2009 for the development of Azar and Changouleh oil fields which belong to the Anaran block. Along with Norway’s Statoil, Lukoil was prospecting for oil in Iran’s Anaran block before it pulled out of the project due to the imposition of sanctions on Iran’s energy sector by the United States and the European Union.

Lukoil reportedly suffered a $63-million loss after the withdrawal.

Based on a memorandum signed between NIOC and Gazprom, the two sides agreed to transfer crude oil from the Caspian Sea to the Oman Sea through Neka-Jask pipeline. The memorandum also envisaged the construction of a refinery in northern Iran and gas swap.

Gazprom also plans to contribute 10 percent to constructing an oil products pipeline stretching from Iran’s northwestern city of Tabriz to the south of Armenia. The total project is estimated to cost $250 million, mostly provided by Iran. This pipeline is 300 kilometers long and is made of pipes measuring 250 millimeters in diameter.

Gazprom will invest in the project through ArmRosGazprom (ARG) which was founded in 1997 as a joint Russian-Armenian natural gas pipeline project. The company organizes the gas supply for Armenia's domestic gas market.

Moreover, every time there has been the talk of extension of Iran-Pakistan gas pipeline to India, Russia’s Gazprom has announced its desire for contributing to the project.

Gazprom earlier offered to operate the project, saying it would be ready to handle production and marketing of gas.

The agreements Iran has signed with Pakistan and Russia include Gazprom’s contribution to the gas pipeline.

As recently as last August, Iran and Russia signed a five-year memorandum according to which proper conditions will be provided for Russian companies to operate hydrocarbon extraction projects. Moreover, the Iranian and Russian officials have discussed the construction of 10 power plants by Russia.

According to data from Russian Energy Ministry, nearly 50 Russian companies are willing to participate in such projects.

The two countries are currently studying the details of a five-billion-dollar oil-for-power plants deal. If such a deal is signed between Iran and Russia, Moscow will be able to sell Iran’s crude to other countries like China. That would be in harmony with Russia’s objective of boosting its presence in East and Southeast Asia. A Russian state company would then be able to sell 2.5-3 million tons a year of Iranian crude oil to African countries and China. To that effect, Russian state-run power utility Inter RAO and Inter RAO Export, as well as Technopromexport would supply equipment and help construct the power stations in Iran.

Iran-Russia cooperation is mainly focused upon fossil and nuclear energies. With regards to fossil energies, formation of Gas Exporting Countries Forum (GECF) was a significant step taken by Iranian and Russian leaders. As far as energy sector is concerned, Iran and Russia can cooperate in the following five fields:

 

1. Cooperation in atomic energy issues and construction of new nuclear power plants in Iran
2. Trading oil and gas production equipment and technology
3. Russia’s direct investment in Iran’s oil and gas fields
4. Bilateral and multilateral cooperation for the construction of energy transmission pipelines
5. Investment and cooperation for building new power plants

 

Iran-Russia-Europe Triangle

 

Russia’s dispute with the West over Ukraine has deeply and quickly reduced the level of economic relations between European countries, particularly the 28-nation European Union, and Russia. They continue to trade restrictions and bans which would mainly affect the energy sector.

Ukraine is also siding with the West and it is likely to ban any transit of Russia’s cargoes, including oil and gas, via its territory. Under such circumstances, the EU nations are required to consider restructuring their energy supply system. Russia can supply gas to Europe through Nord Stream pipeline, but south Europe will get no gas from Russia. There is no alternative to Russian gas for Europe in the market and it will have to shift to other types of fuel. That is likely to double the gas price in Europe. If Europe enters into competition with Asia-Pacific consumers on liquefied natural gas (LNG), the price of this super-cooled gas will jump in both Europe and Asia.

Therefore, the Europeans are looking for other routes to supply their energy needs and Iran is an energy-rich source.

If Europe’s need for energy is juxtaposed with Russia’s gas policy of maintaining its position in gas exports to Europe, the third side of this triangle will be Iran’s huge sources of energy. Then, both sides will see the significance of development of relations with Iran.

On the one hand, the Europeans are willing to invest in Iran’s energy projects in a bid to supply their own energy needs while on the other, the Russians are trying to invest in Iran and change its energy supply routes.

In the meantime, once international sanctions against Iran have been lifted and stability has returned to Iraq, these two hydrocarbon-rich countries in the Middle East will be able to export 20 mb/d of crude oil by 2020. In that case, West-oriented Saudi Arabia, which is capable of exporting 11 mb/d of oil, will see its influence decline significantly while Iran’s political influence on the region will increase. Iran is willing to join BRICS (the association of five major emerging national economies: Brazil, Russia, India, China, and South Africa) and the Shanghai Cooperation Organization (SCO). The SCO is an intergovernmental organization that was founded in 2001 in Shanghai by the leaders of China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan. Iran, along with four other countries, holds observer status at the organization.

Tehran-Moscow alliance will significantly affect the Middle East and even the world developments.

Iran and Russia intend to use their national currencies in their transactions. It means that the Euro and the Dollar will be phased out of Iran-Russia banking transactions. These vehicle currencies will be dealt a serious blow.

 

Convergent Strategic Policies

 

Iran and Russia both need stable energy markets in the world and their cooperation is very important in this regard. For example, the falling crude oil prices will pose challenges to both Iran and Russia. Both countries enjoy good potentials for oil transactions and at the time oil producing countries are diversifying their trade structure, bilateral cooperation between Tehran and Moscow is important. Russia’s proposal for Iran’s presence in Saint-Petersburg Stock Exchange is a practical approach.

The use of Russia’s national currency Ruble at Iran’s Petroleum Commodity Exchange in Kish would be another important step towards better ties between the two countries.

Russian officials attach great importance to the presence of their companies in Iran’s oil and gas sectors. The recent signature of agreements between Iran and Russia for production from South Pars gas field and development of oil and gas fields could facilitate bilateral cooperation between Tehran and Moscow.

On the global energy scene, Iran and Russia are allies rather than rivals. Given massive potentials and capacities and the interest of both countries for cooperation in different projects and taking into consideration the opportunities and threats they face, Tehran and Moscow are expected to take greater strides for strengthening their relations.

Bracing for pragmatism, changing the view from a tactical partner to a strategic partner, underlining the role of regional cooperation organizations and broadening economic and cultural ties could accelerate this process.

 

Energy Cooperation Perspective

 

Iran and Russia are important countries in global equations and both have been influential in energy transactions. Russia is the second largest oil producer and exporter after Saudi Arabia and is among the world’ majors gas producers. Oil and gas produced by Central Asian countries is exported to Europe via Russia. Iran [comes second] in terms of natural gas reserves and it has had to recover more gas in order to supply the world market’s growing needs.

Besides bilateral aspects, Iran-Russia relations also enjoy regional and international aspects and the West has always been sensitive to Iran-Russia relations.

Tehran and Moscow may be viewed as rivals in terms of energy exports to different regions, including Europe. However, their unity on the issue of energy could largely affect world markets.

Iran and Russia are both rich in energy and they can largely affect oil and gas supply and pricing. Their unity will leave impacts on the energy markets.

That is why Iran and Russia intend to create an energy axis.

Iran-Russia Axis of Energy

 

By Shuaib Bahman

 

Introduction

 

The relations between Iran and Russia following the collapse of the Union of Soviet Socialist Republics (USSR) could not be reviewed without taking into consideration the role of energy.

The effect of energy on the behavior of both Iran and Russia has been growing. The issue of energy has caused regional and international challenges for both countries. For example, energy deals which have been reached under US influence in recent years on energy transfer routes in the region are such that they would avoid the development of Iran-Russia ties in the energy sector.

Iran and Russia have undertaken extensive efforts in recent years to broaden their relations in the energy sector. For example, Russia built a nuclear power plant for Iran and Russian companies have invested in Iran’s oil and gas projects.

 

Energy Cooperation

 

In 2007, Russia’s Gazprom announced its intention to develop two or three phases of the giant South Pars gas field. The Russian gas company also announced that it was willing to invest in Iran’s oil sector, too. To that effect, Gazprom Neft and National Iranian Oil Company (NIOC) signed a heads of agreement in November 2009 for the development of Azar and Changouleh oil fields which belong to the Anaran block. Along with Norway’s Statoil, Lukoil was prospecting for oil in Iran’s Anaran block before it pulled out of the project due to the imposition of sanctions on Iran’s energy sector by the United States and the European Union.

Lukoil reportedly suffered a $63-million loss after the withdrawal.

Based on a memorandum signed between NIOC and Gazprom, the two sides agreed to transfer crude oil from the Caspian Sea to the Oman Sea through Neka-Jask pipeline. The memorandum also envisaged the construction of a refinery in northern Iran and gas swap.

Gazprom also plans to contribute 10 percent to constructing an oil products pipeline stretching from Iran’s northwestern city of Tabriz to the south of Armenia. The total project is estimated to cost $250 million, mostly provided by Iran. This pipeline is 300 kilometers long and is made of pipes measuring 250 millimeters in diameter.

Gazprom will invest in the project through ArmRosGazprom (ARG) which was founded in 1997 as a joint Russian-Armenian natural gas pipeline project. The company organizes the gas supply for Armenia's domestic gas market.

Moreover, every time there has been the talk of extension of Iran-Pakistan gas pipeline to India, Russia’s Gazprom has announced its desire for contributing to the project.

Gazprom earlier offered to operate the project, saying it would be ready to handle production and marketing of gas.

The agreements Iran has signed with Pakistan and Russia include Gazprom’s contribution to the gas pipeline.

As recently as last August, Iran and Russia signed a five-year memorandum according to which proper conditions will be provided for Russian companies to operate hydrocarbon extraction projects. Moreover, the Iranian and Russian officials have discussed the construction of 10 power plants by Russia.

According to data from Russian Energy Ministry, nearly 50 Russian companies are willing to participate in such projects.

The two countries are currently studying the details of a five-billion-dollar oil-for-power plants deal. If such a deal is signed between Iran and Russia, Moscow will be able to sell Iran’s crude to other countries like China. That would be in harmony with Russia’s objective of boosting its presence in East and Southeast Asia. A Russian state company would then be able to sell 2.5-3 million tons a year of Iranian crude oil to African countries and China. To that effect, Russian state-run power utility Inter RAO and Inter RAO Export, as well as Technopromexport would supply equipment and help construct the power stations in Iran.

Iran-Russia cooperation is mainly focused upon fossil and nuclear energies. With regards to fossil energies, formation of Gas Exporting Countries Forum (GECF) was a significant step taken by Iranian and Russian leaders. As far as energy sector is concerned, Iran and Russia can cooperate in the following five fields:

 

1. Cooperation in atomic energy issues and construction of new nuclear power plants in Iran
2. Trading oil and gas production equipment and technology
3. Russia’s direct investment in Iran’s oil and gas fields
4. Bilateral and multilateral cooperation for the construction of energy transmission pipelines
5. Investment and cooperation for building new power plants

 

Iran-Russia-Europe Triangle

 

Russia’s dispute with the West over Ukraine has deeply and quickly reduced the level of economic relations between European countries, particularly the 28-nation European Union, and Russia. They continue to trade restrictions and bans which would mainly affect the energy sector.

Ukraine is also siding with the West and it is likely to ban any transit of Russia’s cargoes, including oil and gas, via its territory. Under such circumstances, the EU nations are required to consider restructuring their energy supply system. Russia can supply gas to Europe through Nord Stream pipeline, but south Europe will get no gas from Russia. There is no alternative to Russian gas for Europe in the market and it will have to shift to other types of fuel. That is likely to double the gas price in Europe. If Europe enters into competition with Asia-Pacific consumers on liquefied natural gas (LNG), the price of this super-cooled gas will jump in both Europe and Asia.

Therefore, the Europeans are looking for other routes to supply their energy needs and Iran is an energy-rich source.

If Europe’s need for energy is juxtaposed with Russia’s gas policy of maintaining its position in gas exports to Europe, the third side of this triangle will be Iran’s huge sources of energy. Then, both sides will see the significance of development of relations with Iran.

On the one hand, the Europeans are willing to invest in Iran’s energy projects in a bid to supply their own energy needs while on the other, the Russians are trying to invest in Iran and change its energy supply routes.

In the meantime, once international sanctions against Iran have been lifted and stability has returned to Iraq, these two hydrocarbon-rich countries in the Middle East will be able to export 20 mb/d of crude oil by 2020. In that case, West-oriented Saudi Arabia, which is capable of exporting 11 mb/d of oil, will see its influence decline significantly while Iran’s political influence on the region will increase. Iran is willing to join BRICS (the association of five major emerging national economies: Brazil, Russia, India, China, and South Africa) and the Shanghai Cooperation Organization (SCO). The SCO is an intergovernmental organization that was founded in 2001 in Shanghai by the leaders of China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan. Iran, along with four other countries, holds observer status at the organization.

Tehran-Moscow alliance will significantly affect the Middle East and even the world developments.

Iran and Russia intend to use their national currencies in their transactions. It means that the Euro and the Dollar will be phased out of Iran-Russia banking transactions. These vehicle currencies will be dealt a serious blow.

 

Convergent Strategic Policies

 

Iran and Russia both need stable energy markets in the world and their cooperation is very important in this regard. For example, the falling crude oil prices will pose challenges to both Iran and Russia. Both countries enjoy good potentials for oil transactions and at the time oil producing countries are diversifying their trade structure, bilateral cooperation between Tehran and Moscow is important. Russia’s proposal for Iran’s presence in Saint-Petersburg Stock Exchange is a practical approach.

The use of Russia’s national currency Ruble at Iran’s Petroleum Commodity Exchange in Kish would be another important step towards better ties between the two countries.

Russian officials attach great importance to the presence of their companies in Iran’s oil and gas sectors. The recent signature of agreements between Iran and Russia for production from South Pars gas field and development of oil and gas fields could facilitate bilateral cooperation between Tehran and Moscow.

On the global energy scene, Iran and Russia are allies rather than rivals. Given massive potentials and capacities and the interest of both countries for cooperation in different projects and taking into consideration the opportunities and threats they face, Tehran and Moscow are expected to take greater strides for strengthening their relations.

Bracing for pragmatism, changing the view from a tactical partner to a strategic partner, underlining the role of regional cooperation organizations and broadening economic and cultural ties could accelerate this process.

 

Energy Cooperation Perspective

 

Iran and Russia are important countries in global equations and both have been influential in energy transactions. Russia is the second largest oil producer and exporter after Saudi Arabia and is among the world’ majors gas producers. Oil and gas produced by Central Asian countries is exported to Europe via Russia. Iran [comes second] in terms of natural gas reserves and it has had to recover more gas in order to supply the world market’s growing needs.

Besides bilateral aspects, Iran-Russia relations also enjoy regional and international aspects and the West has always been sensitive to Iran-Russia relations.

Tehran and Moscow may be viewed as rivals in terms of energy exports to different regions, including Europe. However, their unity on the issue of energy could largely affect world markets.

Iran and Russia are both rich in energy and they can largely affect oil and gas supply and pricing. Their unity will leave impacts on the energy markets.

That is why Iran and Russia intend to create an energy axis.

RIPI Building Refinery in Southeast Asia

 

Iran’s Research Institute of Petroleum Industry (RIPI) is a prominent industrial research center. It has a positive background due to years of scientific research. It recently marked its 56^th anniversary of establishment. RIPI senior managers talked about the scientific and research achievements of this research body and highlighted RIPI’s potentialities in providing services to foreign countries and markets, including the construction of a refinery for processing heavy crude oil in Southeast Asia.

Hamid-Reza Katouzian, head of RIPI, said research institutes are a major link connecting technology and industry. He said research centers clear the way for self-sufficiency and economic independence, adding: “The RIPI is tasked with scientific and technological research and development in its specialized fields for the implementation of the country’s economic policies.”

He said that RIPI is a rival for foreign companies and noted that researchers and specialists have always fared better than foreign contractors in the petroleum industry in resolving problems.

Katouzian said Petroleum Minister Bijan Namdar Zangeneh is a firm supporter of RIPI, adding that the Petroleum Ministry expects the RIPI to develop effective research projects and help the industry.

He said that establishment of satellite companies are being established to commercialize modern technologies.

Katouzian said satellite companies at RIPI will accelerate the commercialization of research projects in favor of industries.

 

Knowledge-Based Companies

 

Amir-Abbas Hosseini, deputy head of RIPI for technology and international affairs, said in the ceremony that the research institute is trying to establish knowledge-based companies to be involved in trade development. He said the RIPI plans to play the role of a petroleum research and development holding in favor of knowledge-based economy.

“Paying special attention to technology as the basis of development is a requirement for the realization of the objectives of the 2025 Vision Plan. This research center is the only reference which is aligned with the owners of technology in the world due to its long background and potentialities,” said Hosseini.

He said RIPI is present in Southeast Asia as licensor, adding that such activities are proofs for the transition of this research institute to technological and practical research.

“Conducting the biggest research projects in the country, feasibility of major national projects and owning technical knowhow for designing and building refineries all bear proof” to RIPI’s cooperation with the industry, he said.

Hosseini referred to the involvement of RIPI in the development of hydrocarbon fields, adding that this center is a major rival for foreign companies in the domestic projects.

He said the RIPI believes that it would not grow without competing with owners of technology.

 

Persian Gulf Pearl

 

Ali Moallemi, deputy head of the Upstream Department of RIPI, said the project for modeling sedimentary oil reservoirs in the Persian Gulf and the Sea of Oman is in the final stage. He said the Persian Gulf Pearl project is the most important research project under way by RIPI.

He said the project, which is designed to provide data about recoverable hydrocarbon resources in the Persian Gulf and the Sea of Oman, is under way under the supervision of Iranian Offshore Oil Company (IOOC).

“Moreover, the integrated study of reservoir horizons in Abadan Desert is under way at the Upstream Department of RIPI with the objective of determining the reasons of absence of homogeny in these horizons and reducing exploration costs,” said Moallemi.

He also touched on a project for exploring gas hydrates in the Sea of Oman, saying this project, which is being monitored by the Exploration Directorate of National Iranian Oil Company, is aimed at quantitative assessment of huge reserves of gas hydrates in the Sea of Oman.

He also said that RIPI is conducting rock and fluid tests in compliance with standards observed by world companies. A reservoir rock is a permeable subsurface rock that contains petroleum. It must be both porous and permeable. Reservoir rocks are dominantly sedimentary (sandstones and carbonates); however, highly fractured igneous and metamorphic rocks have been known to produce hydrocarbons, albeit on a much smaller scale.

 

Ultra-heavy Crude Processing

 

Mansour Bazmi, head of the downstream department of RIPI, said Iran is designing and building a heavy oil refinery in Southeast Asia.

“This refinery will be built to refine heavy crude oil produced from Norouz and Soroush oil fields in Iran,” he said.

Bazmi said this refinery has the capacity to treat 30,000 b/d of ultra- heavy crude. “High-quality bitumen and other products are also expected to be produced in this refinery.”

The official also announced the implementation of a project for premium gasoline production from industrial wastes at Kharg Petrochemical Plant, saying: “Until recently, black wastes spread in the air. Today, instead of burning them which pollutes the environment, they are used for producing premium gasoline at Kharg Petrochemical Plant.”

 

Bioremediation

 

Mahmoud Torki, head of the Environment and Energy Department of RIPI, said foreign companies block and stockpile oil pollutants in order to clean oil sludge-contaminated soil

“But the RIPI has managed to clean oil sludge-contaminated soil in Siri and Khangiran by using biological methods,” he said.

“In this method, soil microbes clean contaminated soil in six months,” he said.

Torki also said that modeling of pollutant emission in ten phases of the giant offshore South Pars gas field is under way and that mobile treatment facilities have been designed for gas refineries.

Big Investment in Environmental Projects

 

Iran’s Petroleum Ministry, while handling its main tasks in the upstream and downstream sectors, envisages environmental projects as one of its main plans. Under the Fifth Five-Year Economic Development Plan, which ends in March 2015), IRR 25 trillion has been invested directly in the environment. A project for recycling gasoline vapor and another project for expanding green belt are two cases in point.

Mohammad-Hussein Ardeshiri, director for health, safety and environment (HSE) of Petroleum Ministry, said the gasoline vapor recycling project is 50 percent complete.

He added that the project( known as KAHAB in Iran), which is estimated to come on-stream in two years, will lead to saving 100 million liters of gasoline through vapor gathering system.

He said that the project will be implemented in several phases, including in the gasoline tanks, gasoline storage tanks, gasoline tankers and gas stations. So far, it has been tested on 2,500 tankers.

Ardeshiri said Iran’s polluted cities are prioritized in this project, adding that more financial allocation is needed for accelerating the start-up of the project.

The project for reducing, guiding, transferring and recycling gasoline vapor started in 2008 at National Iranian Oil Refining and Distribution Company (NIORDC). After several years of halt, the conducting the project has been resumed and is expected to become fully operational by March 2017.

 

Treatment Facilities

 

Ardeshiri said waste treatment projects have been implemented in the petroleum industry, adding that full removal of contamination would still take four years.

He said all Iranian petroleum industry’s facilities and plants are equipped with industrial waste and wastewater treatment facilities; however, he noted that some of them need to be renovated.

Ardeshiri said the Iranian Petroleum Ministry has been required by the government to pay for combating desertification on 200,000 ha of land. “This five-year plan has been drafted and the National Iranian South Oil Company will handle it.”

He said so far IRR 300 billion has been spent on mulching, adding that the Petroleum Ministry has expanded green belt and carried out mulching in some regions besides the 200,000 hectares.

 

Standard Green Belt

 

Ardeshiri said the international standard level of green belt in operation zones is 20 percent, while Iran’s Petroleum Ministry has covered more than 22 percent of its facilities with green belt and is making efforts to expand it every year.

“Under the Fifth Five-Year Development Plan, Iran’s Petroleum Ministry has so far invested IRR 25 trillion directly on environmental issues,” he said.

 

Pipelines’ Safety

 

Ardeshiri said Iran’s Supreme National Security Council (SNSC) is reviewing a law regarding the connection between the safety of pipelines and their size and pressure.

“According to the criteria in the Kyoto Protocol, Iran ranks the seventh in terms of CO2 emissions. But thanks to the Research Institute of Petroleum Industry, Iran submits relevant statistical data to the UN three times more than other countries involved. It is noteworthy that we are looking for a national and regional formula to remedy the issue of CO2 emissions. Once this plan is finalized, Iran will fall to the 14^th or 15^th rank, which will be a success” he said.

Oil Shocks and Market Structure Changes

 

After the World War II, demand for oil started growing and it reached its peak in the 1970s. This growing demand was met by more supply by OPEC, particularly its Middle Eastern member states. OPEC’s dominance on the world oil market was alas short-lived and it ended under the impact of factors stemming from the second oil shock.

 

OPEC Survives 1^st Shock

 

During the years between the first and the second oil shocks (1973-1986), the world oil market and on a larger scale, the global economy, witnessed the emergence and then decline of a new powerful player: the Organization of the Petroleum Exporting Countries.

Established in the early 1960s following a gathering of Middle East oil producers plus Venezuela in the Iraqi capital, Baghdad, OPEC first did not catch attention. But, global oil market changes, coupled with political and military crises in the Middle East, pushed the body into bold relief in the 1970s and this organization managed to survive the first oil shock which occurred after Arab members of OPEC quitted supplying oil to Zionist Regime in 1973. OPEC brought the oil pricing mechanism under control and made huge gains from the surge in prices.

Through 1960-1973, demand for OPEC oil grew by 10 percent. Such a growth could not be expected for the second decade of formation of OPEC. In the middle of 1973 and even before the outbreak of Arab- Zionist Regime war, the demand for oil was growing strongly. The official price set by OPEC was much lower than the market spot price. Therefore, it was normal for prices to grow. But the sharp price hike due to Arab- Zionist Regime conflict degenerated into a shock.

 

Oil Prices in OPEC Hands

 

Oil producing countries, particularly OPEC member states, had entered the market to retake control of oil production. The oil shock played well into their hands and they managed to impose their desired prices on the market. The first oil shock in 1973, which was a political instrumentalization of oil, was proof of OPEC’s influence on the market and the depth of vulnerability of oil consumers under the new circumstances.

 

2^nd Oil Shock

 

In the final years leading to the 1979 Islamic Revolution, a new oil crisis emerged as no oil was supplied from Iran due to general strikes by oil service workers. The oil market experienced a second shock.

The fall in Iran’s oil production was hoped to have short-term impacts, but due to a variety of political and economic reasons, its impacts became long-term. Saudi Arabia sought to fill the void in the market, but its falling production affected the market from two aspects: First, the global oil supply declined and second, unusual pressure was exerted on the demand; therefore, the global demand jumped sharply.

Fear of having no oil motivated hasty purchases. The halt in Iran’s oil production worked like a vicious circle which resulted in rush for more purchase of oil to be stocked. The markets were flooded and demand for oil rose significantly. Spot prices had become almost official in the market and vendors used as much as oil they could, to gain more revenues. The price of each barrel of oil soared from $13 to $34 in the Persian Gulf region.

 

Market Structure Change

 

By the end of 1980, the perspective changed as prices trebled in less than a year. The world oil conditions changed drastically. They were all the consequences of the first and the second oil shocks which the market had already experienced. Finally, the prices fell in 1981. The main developments in those years included more supply by non-OPEC countries, economic stagnation in oil consuming countries, the establishment of the International Energy Agency (IEA) to contain the crisis, disruption in energy efficiency plans and emergence of spot market to set the prices.

After the oil prices fell from $29 to below $10, the OPEC pricing mechanism was largely affected by the market mechanism pricing system.

 

Tabriz, Entry Gate of Modernism to Iran

 

For this issue, I recount the story of my four-day trip to East Azarbaijan province and its capital city, Tabriz.

Our plane took off from Mehrabad Airport on August 18 and finally touched down at Tabriz airport. We went straight to a charming hotel in the northwestern city. On the way from the airport to the hotel, I asked the driver about sight-seeing in the city. Without pointing to historic and beautiful churches in Tabriz, Alishah Castle, Kaboud Mosque and the city’s traditional market, he said: “Laleh Park is one of the most visited tourism sites in Tabriz.”

I was wondering what kind of park it was. The driver said: “Laleh Park is a shopping center – profitable for women and loss-producing for their husbands.”

He said that beautiful dresses could be found in this shopping center where delicious Turkic food is also available in eateries.

 

Modern and Attractive Shopping Center

 

In the taxi, I was thinking about this shopping center. After we got the key to our room in the hotel, I took a taxi to the shopping center which was a 10-minute drive. The shopping center was decorated with bricks. It is one of the most beautiful and the most modern shopping centers in Iran. It was founded by Turkish investors in East Azarbaijan province.

Due to its location in northwestern Iran, many travels take place from there to Turkey.

 

Azarbaijan; Home to Historic Churches

 

The following day we decided to visit traditional and historical architecture downtown in Tabriz. Due to its common border with Armenia, East Azarbaijan province houses many historic churches and is home to a large Armenian community.

Many Armenians fled to Iran when Iran and the Ottoman Empire entered a battle. The Armenians settled in East Azarbaijan province and that is why there are so many churches there.

From the earliest days of Christianity there has been a sizable Armenian community in Tabriz, and the city boasts a number of churches, including one referred to by Marco Polo in his travelogue.

 

Nowadays, there are six churches in Tabriz, the most important of which are: Saint Serkis Church, located in Armenian quarter of Tabriz, Baron Avak, which was renovated in 1845; probably the most interesting and the oldest but substantially rebuilt Church of St. Mary (Kelissa-ye Maryam-e Moghaddas) which was completed in 1785, on the corner of North Shari-ati Ave. and Jomhuri Ave; Able Mary Church which was built in 1910 and is on Miar Miar quarter of Tabriz.

 

 Visiting a Distinctive Church

 

The most ancient church in Tabriz is Saint-Mary Church with towering black doors. It is located in a green dead-end alley. An old Armenian couple who have been there since 1965 looks after the church.

What distinguished this church from churches in other cities was its location in the heart of a beautiful green garden. It is the largest and oldest Christian church in Tabriz and a notable centre for Armenian national and religious ceremonies held by the Armenian community of Tabriz. The church is located in the Dik Bashi district of Tabriz.

This church was built in the 6th century AH (12th century AD) and in his travel chronicles, Marco Polo, the famous Venetian traveler who lived during the 8th century AH (14th century AD), referred to this church on his way to China. For many years, Saint Mary's served as the seat of the Azarbaijan Armenian archbishop. It is a beautiful edifice, with annex buildings sprawled over a large area. A board of Armenian peers governs the well-attended church.

 

Spiritual Symbols in the Church Architecture

 

The brick-walled building belonged to well-heeled Armenians who put it at the disposal of poor families gratuitously.

The curator opened the door and we stepped in. the church was surrounded by the tombs of top Armenian figures who had served there. Another door opened into inside the church and the prayer room. The curator opened that door too and I was taken aback. The principle of perfection and symmetry, which characterizes God, was symbolized in the architecture of this church. Two towering columns are erected on both sides of the altar engraved with an image of Saint Maryam and Jesus Christ. Four columns are built symmetrically with their capitals carrying images of four disciples of Jesus Christ. The four are said to have drafted the Bible.

The principle of cutting connection between a spiritual place and the secular world is well respected. No window has been carved in the walls to the outside. Another point which captivated me in the church was the variety of geometry in the arrangement of spaces. It must be referring to the principle of diversity in human being’s needs. For instance, the belfry tower is hexagonal, the altar is triangular and the prayer room is pentagonal.

“Saint Mary Church is one of the oldest churches in Iran,” the curator said, adding that Marco Polo had stayed there while crossing Iran.

The church has been abandoned as minorities living in Tabriz have migrated. The church is now used only for Christian fetes like Easter and New Year celebrations.      

 

Ark or Citadel of Tabriz

 

Ark-e Tabriz in Persian (also called Masjid-e Alishah, Arg-e Alishah) is the impressive remainder of a great and imposing building in the town. The Arg, a huge and crumbling brick citadel, is a notable landmark that was built in the early 14th century on the site of a massive mosque which collapsed over 500 years ago, and which must be one of the largest ever constructed.

Inside the Citadel there is nothing except two arches and an indication of the position of the mehrab; Ali Shah's court has been covered with ignoble buildings, the sanctuary walls have been rebuilt and propped up, and it is hard to believe that any part of this place was ever a mosque.

 

Bazaar

 

Strolling in the center of Tabriz, one is reminded very forcibly that it is a commercial city: one cannot miss its very large and 15th-century covered bazaar. It is already much diminished in its variety of goods, but still a great place for getting hopelessly lost amid its dusty architectural splendors. Its architectural style, numerous caravansaries, mosques, and schools have added further beauty and glory to this complex.

Exact information on the history and origin of the bazaar is not available; however, historical buildings such as the Jam's Mosque, Talebieh School, and Sadeqieh School indicate that the complex is one of the oldest structures of the city. The present structure of bazaar dates back to the closing years of the Zand dynasty (1750-1779 A.D.).

 

Azerbaijan Museum

 

Azerbaijan Museum established on April 1958 is the major archaeological and historical museum in Tabriz, in the northwest of Iran (East Azerbaijan province). The museum consists of three major halls, a side yard, office rooms and a library. It mostly contains objects discovered from excavations in Iranian Azerbaijan also some artworks and sculptures of artists. Its library contains more than 2500 books both hand written and printed on history, archaeology, art and Iranian culture.

Apart from National Museum of Iran in Tehran, Azerbaijan Museum has the largest collection belonging to different periods of Iran's history.

The museum has three galleries. The first gallery bears the oldest remains from 5th millennium BC until Sassanian dynasty (212-656 AD). The museum's monuments include goddesses, Rhytons, two skeletons (male and female) and a carved slab of marble known as Bism Allah-Stone.

The second gallery consists of two parts: one for Islamic archeology and another part for displaying coins and seals. Part one involves pottery dated from the 10th to the 19th centuries. The coins of this gallery (part two), began with the Achamenid dynasty and end in the Qajar dynasty. The displayed seals and stamps date from the third millennium BC to Islamic eras.

In the second gallery, a Sassanian agate stamp seal with sun and moon image and Pahlavic inscriptions are on display.

The third gallery includes some sculptures made by Ahad Hosseini. They are made of plaster and represent the sculptor's own image about the fate of mankind in the 20th century.

 

In the yard of museum some stone figurines, statues, rams and inscriptions are kept.

 

Tabriz in History

 

The city has a long and turbulent history although the early history of Tabriz is shrouded in legend and mystery, the town's origin is believed to date back to distant antiquity, perhaps even before the Sassanian era (224 - 651 A.D.). The oldest stone tablet with a reference to Tabriz is that of Sargon the second, the Assyrian King. The tablet refers to a place called Tauri Castle and Tarmkis. The historians believe this castle was situated on the site of the present day Tabriz. It was the capital of Azarbaijan in the 3rd century A.D. and again under the Mongol Ilkhanid dynasty (1256 - 1353), although for some time Maragheh supplanted it.

During the reign of Aqa Khan of the Ilkhanids, as well as under the reign of Ghazan Khan, Tabriz reached the peak of glory and importance. Many great artists and philosophers from all over the world have traveled to Tabriz. In 1392, after the end of Mongol rule, the town was sacked by Tamerlane. It was soon restored under the Turkman tribe of the Qara Qoyunlu, who established a short-lived local dynasty. Under the Safavids it rose from regional to national capital for a short period, but the second of the Safavid kings, Shah Tahmasb, moved the capital to Qazvin because of the vulnerability of Tabriz to Ottoman attacks. The town then went into a period of decline, fought over by the Iranians, Ottomans and Russians and struck by earthquake.

Tabriz was the residence of the crown prince under the Qajar kings, but the town did not return to prosperity until the second half of the 19th century. The greatest boost to Tabriz came with the opening up of Iran to the West at the turn of this century, when it became the main staging post between the interior of Iran and the Black Sea and, for a short time, the economic capital. In 1908 it was the center of a revolt against Mohammad Ali Shah, which was only put down with the brutal intervention of the Russians. In the second Irano-Russian War the city was occupied by the Czar troops. However, it was returned to Iran following the signing of Turkmanchai Treaty, a peace and trade settlement that ended the Irano-Russian War of 1826-1828.

Tabriz, Entry Gate of Modernism to Iran

 

For this issue, I recount the story of my four-day trip to East Azarbaijan province and its capital city, Tabriz.

Our plane took off from Mehrabad Airport on August 18 and finally touched down at Tabriz airport. We went straight to a charming hotel in the northwestern city. On the way from the airport to the hotel, I asked the driver about sight-seeing in the city. Without pointing to historic and beautiful churches in Tabriz, Alishah Castle, Kaboud Mosque and the city’s traditional market, he said: “Laleh Park is one of the most visited tourism sites in Tabriz.”

I was wondering what kind of park it was. The driver said: “Laleh Park is a shopping center – profitable for women and loss-producing for their husbands.”

He said that beautiful dresses could be found in this shopping center where delicious Turkic food is also available in eateries.

 

Modern and Attractive Shopping Center

 

In the taxi, I was thinking about this shopping center. After we got the key to our room in the hotel, I took a taxi to the shopping center which was a 10-minute drive. The shopping center was decorated with bricks. It is one of the most beautiful and the most modern shopping centers in Iran. It was founded by Turkish investors in East Azarbaijan province.

Due to its location in northwestern Iran, many travels take place from there to Turkey.

 

Azarbaijan; Home to Historic Churches

 

The following day we decided to visit traditional and historical architecture downtown in Tabriz. Due to its common border with Armenia, East Azarbaijan province houses many historic churches and is home to a large Armenian community.

Many Armenians fled to Iran when Iran and the Ottoman Empire entered a battle. The Armenians settled in East Azarbaijan province and that is why there are so many churches there.

From the earliest days of Christianity there has been a sizable Armenian community in Tabriz, and the city boasts a number of churches, including one referred to by Marco Polo in his travelogue.

 

Nowadays, there are six churches in Tabriz, the most important of which are: Saint Serkis Church, located in Armenian quarter of Tabriz, Baron Avak, which was renovated in 1845; probably the most interesting and the oldest but substantially rebuilt Church of St. Mary (Kelissa-ye Maryam-e Moghaddas) which was completed in 1785, on the corner of North Shari-ati Ave. and Jomhuri Ave; Able Mary Church which was built in 1910 and is on Miar Miar quarter of Tabriz.

 

 Visiting a Distinctive Church

 

The most ancient church in Tabriz is Saint-Mary Church with towering black doors. It is located in a green dead-end alley. An old Armenian couple who have been there since 1965 looks after the church.

What distinguished this church from churches in other cities was its location in the heart of a beautiful green garden. It is the largest and oldest Christian church in Tabriz and a notable centre for Armenian national and religious ceremonies held by the Armenian community of Tabriz. The church is located in the Dik Bashi district of Tabriz.

This church was built in the 6th century AH (12th century AD) and in his travel chronicles, Marco Polo, the famous Venetian traveler who lived during the 8th century AH (14th century AD), referred to this church on his way to China. For many years, Saint Mary's served as the seat of the Azarbaijan Armenian archbishop. It is a beautiful edifice, with annex buildings sprawled over a large area. A board of Armenian peers governs the well-attended church.

 

Spiritual Symbols in the Church Architecture

 

The brick-walled building belonged to well-heeled Armenians who put it at the disposal of poor families gratuitously.

The curator opened the door and we stepped in. the church was surrounded by the tombs of top Armenian figures who had served there. Another door opened into inside the church and the prayer room. The curator opened that door too and I was taken aback. The principle of perfection and symmetry, which characterizes God, was symbolized in the architecture of this church. Two towering columns are erected on both sides of the altar engraved with an image of Saint Maryam and Jesus Christ. Four columns are built symmetrically with their capitals carrying images of four disciples of Jesus Christ. The four are said to have drafted the Bible.

The principle of cutting connection between a spiritual place and the secular world is well respected. No window has been carved in the walls to the outside. Another point which captivated me in the church was the variety of geometry in the arrangement of spaces. It must be referring to the principle of diversity in human being’s needs. For instance, the belfry tower is hexagonal, the altar is triangular and the prayer room is pentagonal.

“Saint Mary Church is one of the oldest churches in Iran,” the curator said, adding that Marco Polo had stayed there while crossing Iran.

The church has been abandoned as minorities living in Tabriz have migrated. The church is now used only for Christian fetes like Easter and New Year celebrations.      

 

Ark or Citadel of Tabriz

 

Ark-e Tabriz in Persian (also called Masjid-e Alishah, Arg-e Alishah) is the impressive remainder of a great and imposing building in the town. The Arg, a huge and crumbling brick citadel, is a notable landmark that was built in the early 14th century on the site of a massive mosque which collapsed over 500 years ago, and which must be one of the largest ever constructed.

Inside the Citadel there is nothing except two arches and an indication of the position of the mehrab; Ali Shah's court has been covered with ignoble buildings, the sanctuary walls have been rebuilt and propped up, and it is hard to believe that any part of this place was ever a mosque.

 

Bazaar

 

Strolling in the center of Tabriz, one is reminded very forcibly that it is a commercial city: one cannot miss its very large and 15th-century covered bazaar. It is already much diminished in its variety of goods, but still a great place for getting hopelessly lost amid its dusty architectural splendors. Its architectural style, numerous caravansaries, mosques, and schools have added further beauty and glory to this complex.

Exact information on the history and origin of the bazaar is not available; however, historical buildings such as the Jam's Mosque, Talebieh School, and Sadeqieh School indicate that the complex is one of the oldest structures of the city. The present structure of bazaar dates back to the closing years of the Zand dynasty (1750-1779 A.D.).

 

Azerbaijan Museum

 

Azerbaijan Museum established on April 1958 is the major archaeological and historical museum in Tabriz, in the northwest of Iran (East Azerbaijan province). The museum consists of three major halls, a side yard, office rooms and a library. It mostly contains objects discovered from excavations in Iranian Azerbaijan also some artworks and sculptures of artists. Its library contains more than 2500 books both hand written and printed on history, archaeology, art and Iranian culture.

Apart from National Museum of Iran in Tehran, Azerbaijan Museum has the largest collection belonging to different periods of Iran's history.

The museum has three galleries. The first gallery bears the oldest remains from 5th millennium BC until Sassanian dynasty (212-656 AD). The museum's monuments include goddesses, Rhytons, two skeletons (male and female) and a carved slab of marble known as Bism Allah-Stone.

The second gallery consists of two parts: one for Islamic archeology and another part for displaying coins and seals. Part one involves pottery dated from the 10th to the 19th centuries. The coins of this gallery (part two), began with the Achamenid dynasty and end in the Qajar dynasty. The displayed seals and stamps date from the third millennium BC to Islamic eras.

In the second gallery, a Sassanian agate stamp seal with sun and moon image and Pahlavic inscriptions are on display.

The third gallery includes some sculptures made by Ahad Hosseini. They are made of plaster and represent the sculptor's own image about the fate of mankind in the 20th century.

 

In the yard of museum some stone figurines, statues, rams and inscriptions are kept.

 

Tabriz in History

 

The city has a long and turbulent history although the early history of Tabriz is shrouded in legend and mystery, the town's origin is believed to date back to distant antiquity, perhaps even before the Sassanian era (224 - 651 A.D.). The oldest stone tablet with a reference to Tabriz is that of Sargon the second, the Assyrian King. The tablet refers to a place called Tauri Castle and Tarmkis. The historians believe this castle was situated on the site of the present day Tabriz. It was the capital of Azarbaijan in the 3rd century A.D. and again under the Mongol Ilkhanid dynasty (1256 - 1353), although for some time Maragheh supplanted it.

During the reign of Aqa Khan of the Ilkhanids, as well as under the reign of Ghazan Khan, Tabriz reached the peak of glory and importance. Many great artists and philosophers from all over the world have traveled to Tabriz. In 1392, after the end of Mongol rule, the town was sacked by Tamerlane. It was soon restored under the Turkman tribe of the Qara Qoyunlu, who established a short-lived local dynasty. Under the Safavids it rose from regional to national capital for a short period, but the second of the Safavid kings, Shah Tahmasb, moved the capital to Qazvin because of the vulnerability of Tabriz to Ottoman attacks. The town then went into a period of decline, fought over by the Iranians, Ottomans and Russians and struck by earthquake.

Tabriz was the residence of the crown prince under the Qajar kings, but the town did not return to prosperity until the second half of the 19th century. The greatest boost to Tabriz came with the opening up of Iran to the West at the turn of this century, when it became the main staging post between the interior of Iran and the Black Sea and, for a short time, the economic capital. In 1908 it was the center of a revolt against Mohammad Ali Shah, which was only put down with the brutal intervention of the Russians. In the second Irano-Russian War the city was occupied by the Czar troops. However, it was returned to Iran following the signing of Turkmanchai Treaty, a peace and trade settlement that ended the Irano-Russian War of 1826-1828.

Tabriz, Entry Gate of Modernism to Iran

 

For this issue, I recount the story of my four-day trip to East Azarbaijan province and its capital city, Tabriz.

Our plane took off from Mehrabad Airport on August 18 and finally touched down at Tabriz airport. We went straight to a charming hotel in the northwestern city. On the way from the airport to the hotel, I asked the driver about sight-seeing in the city. Without pointing to historic and beautiful churches in Tabriz, Alishah Castle, Kaboud Mosque and the city’s traditional market, he said: “Laleh Park is one of the most visited tourism sites in Tabriz.”

I was wondering what kind of park it was. The driver said: “Laleh Park is a shopping center – profitable for women and loss-producing for their husbands.”

He said that beautiful dresses could be found in this shopping center where delicious Turkic food is also available in eateries.

 

Modern and Attractive Shopping Center

 

In the taxi, I was thinking about this shopping center. After we got the key to our room in the hotel, I took a taxi to the shopping center which was a 10-minute drive. The shopping center was decorated with bricks. It is one of the most beautiful and the most modern shopping centers in Iran. It was founded by Turkish investors in East Azarbaijan province.

Due to its location in northwestern Iran, many travels take place from there to Turkey.

 

Azarbaijan; Home to Historic Churches

 

The following day we decided to visit traditional and historical architecture downtown in Tabriz. Due to its common border with Armenia, East Azarbaijan province houses many historic churches and is home to a large Armenian community.

Many Armenians fled to Iran when Iran and the Ottoman Empire entered a battle. The Armenians settled in East Azarbaijan province and that is why there are so many churches there.

From the earliest days of Christianity there has been a sizable Armenian community in Tabriz, and the city boasts a number of churches, including one referred to by Marco Polo in his travelogue.

 

Nowadays, there are six churches in Tabriz, the most important of which are: Saint Serkis Church, located in Armenian quarter of Tabriz, Baron Avak, which was renovated in 1845; probably the most interesting and the oldest but substantially rebuilt Church of St. Mary (Kelissa-ye Maryam-e Moghaddas) which was completed in 1785, on the corner of North Shari-ati Ave. and Jomhuri Ave; Able Mary Church which was built in 1910 and is on Miar Miar quarter of Tabriz.

 

 Visiting a Distinctive Church

 

The most ancient church in Tabriz is Saint-Mary Church with towering black doors. It is located in a green dead-end alley. An old Armenian couple who have been there since 1965 looks after the church.

What distinguished this church from churches in other cities was its location in the heart of a beautiful green garden. It is the largest and oldest Christian church in Tabriz and a notable centre for Armenian national and religious ceremonies held by the Armenian community of Tabriz. The church is located in the Dik Bashi district of Tabriz.

This church was built in the 6th century AH (12th century AD) and in his travel chronicles, Marco Polo, the famous Venetian traveler who lived during the 8th century AH (14th century AD), referred to this church on his way to China. For many years, Saint Mary's served as the seat of the Azarbaijan Armenian archbishop. It is a beautiful edifice, with annex buildings sprawled over a large area. A board of Armenian peers governs the well-attended church.

 

Spiritual Symbols in the Church Architecture

 

The brick-walled building belonged to well-heeled Armenians who put it at the disposal of poor families gratuitously.

The curator opened the door and we stepped in. the church was surrounded by the tombs of top Armenian figures who had served there. Another door opened into inside the church and the prayer room. The curator opened that door too and I was taken aback. The principle of perfection and symmetry, which characterizes God, was symbolized in the architecture of this church. Two towering columns are erected on both sides of the altar engraved with an image of Saint Maryam and Jesus Christ. Four columns are built symmetrically with their capitals carrying images of four disciples of Jesus Christ. The four are said to have drafted the Bible.

The principle of cutting connection between a spiritual place and the secular world is well respected. No window has been carved in the walls to the outside. Another point which captivated me in the church was the variety of geometry in the arrangement of spaces. It must be referring to the principle of diversity in human being’s needs. For instance, the belfry tower is hexagonal, the altar is triangular and the prayer room is pentagonal.

“Saint Mary Church is one of the oldest churches in Iran,” the curator said, adding that Marco Polo had stayed there while crossing Iran.

The church has been abandoned as minorities living in Tabriz have migrated. The church is now used only for Christian fetes like Easter and New Year celebrations.      

 

Ark or Citadel of Tabriz

 

Ark-e Tabriz in Persian (also called Masjid-e Alishah, Arg-e Alishah) is the impressive remainder of a great and imposing building in the town. The Arg, a huge and crumbling brick citadel, is a notable landmark that was built in the early 14th century on the site of a massive mosque which collapsed over 500 years ago, and which must be one of the largest ever constructed.

Inside the Citadel there is nothing except two arches and an indication of the position of the mehrab; Ali Shah's court has been covered with ignoble buildings, the sanctuary walls have been rebuilt and propped up, and it is hard to believe that any part of this place was ever a mosque.

 

Bazaar

 

Strolling in the center of Tabriz, one is reminded very forcibly that it is a commercial city: one cannot miss its very large and 15th-century covered bazaar. It is already much diminished in its variety of goods, but still a great place for getting hopelessly lost amid its dusty architectural splendors. Its architectural style, numerous caravansaries, mosques, and schools have added further beauty and glory to this complex.

Exact information on the history and origin of the bazaar is not available; however, historical buildings such as the Jam's Mosque, Talebieh School, and Sadeqieh School indicate that the complex is one of the oldest structures of the city. The present structure of bazaar dates back to the closing years of the Zand dynasty (1750-1779 A.D.).

 

Azerbaijan Museum

 

Azerbaijan Museum established on April 1958 is the major archaeological and historical museum in Tabriz, in the northwest of Iran (East Azerbaijan province). The museum consists of three major halls, a side yard, office rooms and a library. It mostly contains objects discovered from excavations in Iranian Azerbaijan also some artworks and sculptures of artists. Its library contains more than 2500 books both hand written and printed on history, archaeology, art and Iranian culture.

Apart from National Museum of Iran in Tehran, Azerbaijan Museum has the largest collection belonging to different periods of Iran's history.

The museum has three galleries. The first gallery bears the oldest remains from 5th millennium BC until Sassanian dynasty (212-656 AD). The museum's monuments include goddesses, Rhytons, two skeletons (male and female) and a carved slab of marble known as Bism Allah-Stone.

The second gallery consists of two parts: one for Islamic archeology and another part for displaying coins and seals. Part one involves pottery dated from the 10th to the 19th centuries. The coins of this gallery (part two), began with the Achamenid dynasty and end in the Qajar dynasty. The displayed seals and stamps date from the third millennium BC to Islamic eras.

In the second gallery, a Sassanian agate stamp seal with sun and moon image and Pahlavic inscriptions are on display.

The third gallery includes some sculptures made by Ahad Hosseini. They are made of plaster and represent the sculptor's own image about the fate of mankind in the 20th century.

 

In the yard of museum some stone figurines, statues, rams and inscriptions are kept.

 

Tabriz in History

 

The city has a long and turbulent history although the early history of Tabriz is shrouded in legend and mystery, the town's origin is believed to date back to distant antiquity, perhaps even before the Sassanian era (224 - 651 A.D.). The oldest stone tablet with a reference to Tabriz is that of Sargon the second, the Assyrian King. The tablet refers to a place called Tauri Castle and Tarmkis. The historians believe this castle was situated on the site of the present day Tabriz. It was the capital of Azarbaijan in the 3rd century A.D. and again under the Mongol Ilkhanid dynasty (1256 - 1353), although for some time Maragheh supplanted it.

During the reign of Aqa Khan of the Ilkhanids, as well as under the reign of Ghazan Khan, Tabriz reached the peak of glory and importance. Many great artists and philosophers from all over the world have traveled to Tabriz. In 1392, after the end of Mongol rule, the town was sacked by Tamerlane. It was soon restored under the Turkman tribe of the Qara Qoyunlu, who established a short-lived local dynasty. Under the Safavids it rose from regional to national capital for a short period, but the second of the Safavid kings, Shah Tahmasb, moved the capital to Qazvin because of the vulnerability of Tabriz to Ottoman attacks. The town then went into a period of decline, fought over by the Iranians, Ottomans and Russians and struck by earthquake.

Tabriz was the residence of the crown prince under the Qajar kings, but the town did not return to prosperity until the second half of the 19th century. The greatest boost to Tabriz came with the opening up of Iran to the West at the turn of this century, when it became the main staging post between the interior of Iran and the Black Sea and, for a short time, the economic capital. In 1908 it was the center of a revolt against Mohammad Ali Shah, which was only put down with the brutal intervention of the Russians. In the second Irano-Russian War the city was occupied by the Czar troops. However, it was returned to Iran following the signing of Turkmanchai Treaty, a peace and trade settlement that ended the Irano-Russian War of 1826-1828.