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Central Asian states gain additional profit from oil swap via Iran

National Iranian Oil Company's (NIOC) director for international affairs Hojjatollah Ghanimifard on Sunday said the oil producing Caspian Sea littoral states can gain additional profit by transferring or swapping oil via Iran, IRNA reported from Tehran.

He told IRNA that the crude oil received in northern Iran from Russia, Kazakhstan and Turkmenistan is delivered to the clients of the central Asian states in southern Iran and is eventually dispatched to the Asian markets.

"The fee paid by the states bordering the Caspian Sea to transit their crude oil to the destined market through Iran is much lower than conduiting the same via pipeline to the Black Sea or Mediterranean Sea.

"Meanwhile, their crude oil is sold at a higher price on the Asian market compared to the markets to the west of the Suez Canal or northwestern Europe," he added.

Turning to the additional profit gained by the Caspian littoral states by paying less for transit of the crude oil by selling it at a higher price, he hoped that once Kazakhstan-Turkmenistan pipeline is extended to Iran, the bulk of Kazakh crude oil -- as a major Caspian crude oil producer -- will be transited through Iran to international markets.

"The price of Iran's crude oil exported to Asia was higher than that of the European oil market by 3.5 dollars in some days during the first two months of the current Iranian year (started March 20)," he pointed out.

Referring to the cost of crude oil swap among central Asian states for transit via Iran, he said that it varies in accordance with the destination and the quantity of the oil.

"The more the volume of the crude oil, the less the swap fee. The amount ranges between a maximum of 16 dollars per ton for small quantities and a minimum of eight dollars per ton for greater quantities," he added.

Putting the Caspian littoral states current capacity of oil transfer through Neka pipeline at 130,000 barrels/day, he said that it can easily be increased up to 170,000 barrels/day.

... Payvand News - 6/20/04 ... --

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