Iran News ...


Caspian crude swap project suspended due to price differences

Tehran, Feb 5, IRNA -- Caspian crude swap project across Iranian territory is still suspended due to difference in price of the sour and sweet crude despite the capacity for exchange of 170,000 bpd of oil.

Director of the International Affairs Department at National Iranian Oil Company Hojatollah Ghanimifard told IRNA here on Saturday that difference in prices is still high, standing at about six dollars on the average now.

Ghanimifard elaborated that the difference between prices of each barrel of crude such as Oman and Dubai and those of North Sea Brent stands at about six dollars on the average.

He said there is still inclination and tendency to send to the markets in the west, i.e. the Mediterranean and northwest market, part of the sweet and light crude, which could be blended with very heavy crude and marketed in Iran as a crude like Iranian light crude.

He added that the amount of Central Asian crude swap via Iranian territory rose to as high as 70,000 bpd in January compared to that in the months when the gap between prices of the sweet and sour crude were very high.

The official said that as long as the price correlation does not match earlier standards and as long as the Asian market cannot make up the difference between prices of the sour and sweet as well as the light and mild, in tandem with their API, one should be convinced that some of the producers would consider European market economical.

Should the current demand for the sweet and light crude remains intact and should the difference between prices of the sour and sweet crude continue to be in effect, the ongoing oil swap project seems to meet to some extent the demand for crude oil in Asia, he commented.

Ghanimifard said for a very short period of time in 2004, the base price of crude suffered decline in the Asian market compared to that in the European market.

He said should the trend continue and especially if the rise in crude demand in China and India in 2005 affects crude prices in Asia, the difference in prices can make up part of the increase in price of the sweet crude compared to that of the sour crude.

He added that perhaps, some sweet crude producers might be willing to blend their crude with very heavy crude and turn to Iran.

To this end, he said, the Islamic Republic of Iran has decided to make necessary investment in transfer and refining of the Caspian crude in line with its policy to establish good ties with the northern neighbors and solve the problem of the CIS, the Caucasus and Caspian littoral states' access to free waters for export of their crude oil.

The Oil Ministry, he added, seriously started implementing the project since 1998 by establishing an oil terminal in Neka, facilities for oil storage, blending different types of the Caspian crude, establishing pumping stations, laying 312 kilometers of the 30- and 32-inch pipelines and installing necessary installations for transfer of blend crude from Neka port to Tabriz and Tehran refineries.

Ghanimifard said a number of technical reforms and changes were made in Tabriz and Tehran refineries to make the refining of the Caspian Sea blend or 'Neka Crude Blend' possible.

He said the project with the capacity for transfer of about 170,000 bpd of oil came on stream this year at a cost of about dlrs 330 million.

He said that under the project about 170,000 to 500,000 bpd of crude can be swapped a day.

Under the project, the customers of National Iranian Oil Company (NIOC) deliver Caspian crude in Neka port and receive Iranian crude in the Persian Gulf in proportion to the value of the oil they had supplied, he said.

The crude imported from Russia's Siberia, Kazakhstan and Turkmenistan are blended in Neka port and then the blended oil, called Neka Crude Blend, is piped to Tehran and Tabriz refineries for refining.

... Payvand News - 2/5/05 ... --

comments powered by Disqus

Home | ArchiveContact | About |  Web Sites | Bookstore | Persian Calendar | twitter | facebook | RSS Feed

© Copyright 2005 NetNative (All Rights Reserved)