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Iran preparing to resume oil swap with Caspian states

Oil&Gas Materials 10 February 2016 14:53 (UTC +04:00)

Baku, Azerbaijan, Feb.10

By Dalga Khatinoglu- Trend:

Iran says it is preparing to resume oil swap with Caspian littoral states, Mehr news agency reported Feb. 10.

"The capacity of storage facilities in Iran's Neka port is being increased to about 2.5 million barrels per day to resume oil swap with Caspian states," director of Iran's North Oil Terminal Hamid Reza Shahdoust said.

Currently 3 of 9 oil storage facilities are being maintained to be ready to intake 120-130 thousand barrels per day (bpd) of Caspian oil, he said.

Shahdoust added that this capacity would increase to 2.5 mbpd after completion of an offshore pool at Neka oil terminal and maintaining the remained storage facilities.

Shahdoust added that after completion of the offshore pool at Neka oil terminal, the tankers can arrive in and load the crude oil to Neka facilities.

"Currently only the tankers with 5-7 tons capacity can arrive in Neka," he added.

Before, Pirouz Mousavi, the managing director of IOTC told Mehr news agency in November 2015 Russia and Kazakhstan have expressed readiness to resume crude oil swap with Iran.

The imported crude oil from the Caspian states is to be refined at Tehran and Tabriz oil refineries in northern Iran which will lead to saving costs of transferring oil from southern Iran to the mentioned refineries, Mousavi said.

The oil swap project reportedly saves Iran costs of carrying 500,000 bpd of oil from south to north of the country.

Tehran will deliver an equivalent amount of the imported oil to potential buyers in the Persian Gulf ports, he added.

Under oil swap agreements, which started in 1997 and were in place for over 12 years, Iran received crude oil of Azerbaijan, Kazakhstan and Turkmenistan in its northern port of Neka on the Caspian coast and delivered an equal volume to the clients of the same countries in Persian Gulf. Tehran would receive a transit fee from Caspian states over this.

The overall revenue obtained by Iran from 1997 to 2009 has been estimated at about $880 million.

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