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Rouhani’s Astana trip without energy deal

Business Materials 22 December 2016 17:03
Iranian President Hassan Rouhani’s visit to Kazakhstan on December 22 ended without any energy deal
Rouhani’s Astana trip without energy deal

Baku, Azerbaijan, 22 Dec

By Dalga Khatinoglu – Trend:

Iranian President Hassan Rouhani’s visit to Kazakhstan on December 22 ended without any energy deal.

A source in Iran’s Oil Ministry told Trend that “no talks were scheduled to be held about oil and gas issues with Kazakhstan”.

However, several major energy projects have been negotiated between two Caspian littoral nations in the last several months: refinery and power plant construction projects as well as oil swap.

Of course, Rouhani said in Kazakhstan that both Iran and Kazakhstan are oil and gas exporters and can cooperate in this sector.

“We can receive Kazakh oil in Caspian Sea and deliver the same amount of oil to Persian Gulf,” Iranian president said Dec. 22.

Oil swap

Iran is preparing to resume oil swap with Caspian littoral states.

The capacity of storage facilities in Iran's Neka port on the Caspian shore is being increased to about 2.5 million barrels per day (mb/d), director of Iran's North Oil Terminal Hamid Reza Shahdoust said previously.

Currently 3 of 9 oil storage facilities are being maintained to be ready to intake 120-130 thousand b/d of Caspian oil. Only the tankers with 5-7 tons capacity can arrive in Neka now.

Meanwhile, Pirouz Mousavi, the managing director of Iranian Oil Terminals Company told Mehr news agency in November 2015 that 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.

The oil swap project reportedly saves Iran costs of carrying 500,000 b/d 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.

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 as well.

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

Refinery and power plant projects

Iran’s power and water equipment and services export company SUNIR signed a deal with Kazakhstan’s Eurasia Invest Group with $600 million worth in April 2016 to build one wind and two thermal plants in Kazakhstan in 18 months.

The wind power station will have 50 megawatts (MW) capacity and thermal power plants - 250 MW each.

Iran also announced in June 2016 that two nations have planned to build a joint venture oil refinery in Amirabad Port, on the Caspian Sea shore.

It was projected to refine Kazakh oil and then export to other countries.

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Dalga Khatinoglu is the head of Trend Agency's Iran news service, follow him on Twitter: @dalgakhatinoglu

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