Iran preparing Neka terminal for oil-for-goods swap with Russia

Oil&Gas Materials 11 May 2014 16:04 (UTC +04:00)
Iran is preparing Neka terminal, in northern Mazandaran province, for oil-for-goods swap with Russia.

Baku, Azerbaijan, May 11

By Fatih Karimov - Trend:

Iran is preparing Neka terminal, in northern Mazandaran province, for oil-for-goods swap with Russia.

Pirouz Mousavi, Managing Director of the Iranian Oil Terminal Company, said the Neka terminal neighboring the Caspian Sea is being prepared to berth ships of up to 12,000 tons of capacity, Iran's Mehr news agency reported on May 11.

Construction of the terminal's dock has so far progressed by 84 percent, he noted.

On April 6, Mehr quoted National Iranian Oil Company's managing director Roknoddin Javadi as saying that Iran and Russia have not finalized an oil-for-goods deal, although negotiations have entered a new phase.

Negotiations are underway with Russia to identify Iranian oil should be delivered to the Russian side at Iran's northern Neka terminal or at southern Kharg terminal, Javadi added.

Iran and Russia have made progress towards an oil-for-goods deal sources said would be worth up to $20 billion, which would enable Tehran to boost vital energy exports in defiance of Western sanctions, people familiar with the negotiations told Reuters on April 3.

In January Reuters reported Moscow and Tehran were discussing a barter deal that would see Moscow buy up to 500,000 barrels a day of Iranian oil in exchange for Russian equipment and goods.

The White House has said such a deal would raise "serious concerns" and would be inconsistent with the nuclear talks between world powers and Iran.

A Russian source said Moscow had "prepared all documents from its side", adding that completion of a deal was awaiting agreement on what oil price to lock in.

The source said the two sides were looking at a barter arrangement that would see Iranian oil being exchanged for industrial goods including metals and food, but said there was no military equipment involved. The source added that the deal was expected to reach $15 to $20 billion in total and would be done in stages with an initial $6 billion to $8 billion tranche.

Two separate Iranian officials also said the deal was valued at $20 billion. One of the Iranian officials said it would involve exports of around 500,000 barrels a day for two to three years.

"Iran can swap around 300,000 barrels per day via the Caspian Sea and the rest from the (Middle East) Gulf, possibly Bandar Abbas port," one of the Iranian officials said, referring to one of Iran's top oil terminals.

"The price (under negotiation) is lower than the international oil price, but not much, and there are few options. But in general, a few dollars lower than the market price."