Iran plans oil export terminal bypassing Strait of Hormuz

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An Iranian offshore oil rig. Photo - Presstv.ir

Iran announced it has plans to build a new oil terminal bypassing the strategic Strait of Hormuz to boost shipments of Caspian oil, oil ministry news website, Shana, said on Monday.

It also quoted Pirouz Mousavi, the head of the Iranian Oil Terminals Company (IOTC), as saying that Iran plans to build a new export terminal with a storage capacity of 20 million barrels at Bandar Jask, on the Gulf of Oman coast of Iran. The terminal would be connected to the Caspian Sea port of Neka using a 1 million barrel a day pipeline, the statement added.

Iran hopes the new terminal would enable it to export more oil from its Caspian reserves and provide a fall-back option for country’s main export terminal at Kharg Island in case of any eventuality.

“In the event of any type of problem in exporting crude oil from the Kharg terminal, this terminal can provide back up for exports,” Shana quoted him as saying.

Reports suggest the planned terminal – Iran’s version of UAE’s pipeline bypassing the Strait of Hormuz – would have a storage capacity of 20 million barrels and cost around $2.2 billion to build. Kharg terminal near Bushehr has 22 million barrels of storage capacity.

Iran has invested heavily to raise import capacity at its Caspian port of Neka in its bid to enable crude swaps with Turkmenistan and Kazakhstan.

Iran announced a major oil field discovery in the Caspian Sea over the weekend, with Shana reporting preliminary National Iranian oil Company estimates of up to 10 billion barrels of oil deep under the landlocked sea.

Iran has no experience of producing oil from such deepwater fields, which the energy ministry news agency said are at a depth of 2,460 meters.

In the shorter term, Iranian oil minister Rostam Qasemi said on Monday that the country’s oil production capacity would increase by 1.5 million bpd by 2015, Shana said, compared to around 4 million bpd now.

Increased Oil Output

Meanwhile, Iranian Oil Minister Rostam Qasemi announced the country’s oil output will increase by 1.5 million barrels per day (bpd) by 2016.

Speaking on Monday on the sidelines of the inauguration ceremony for the world’s largest polyvinyl chloride (PVC) production unit at the Arvand Petrochemical Complex in Mahshahr in the southwestern province of Khuzestan, Mehr News Agency quoted Qasemi as saying that the daily gas output is projected to rise by 1.47 billion cubic meters.

All development plans related to joint oil and gas fields will by finalized by the end of the first half of the current Iranian calendar year (21 September), he added.

Tehran Times published a report that said Iran’s oil output in April was 3.758 million bpd, 182,000 bpd more than its output in 2011, effectively disproving the claims that output had been impacted by the sanctions imposed on Iran.

According to OPEC’s Monthly Oil Market Report, on average, Iran produced 3.576 million barrels of crude oil per day in 2011 and 3.544 million bpd in 2010, the daily reported.

The country’s oil production has steadily increased in 2012, rising to 3.758 million bpd in April, the OPEC report said.

Iran’s oil production stood at 3.742 million bpd in the first quarter of 2012, which was an increase of 133,000 bpd in comparison to the output in the fourth quarter of 2011.

Iran has attached priority to boosting gas production capacity at its joint oilfields with Qatar and Saudi Arabia.

Iran shares the South Pars gas field with Qatar. The Iranian share, which is divided into 29 phases, has about 14 trillion cubic meters of gas, or about 8% of total world reserves, and more than 18 billion barrels of liquefied natural gas.

Iran ranks fourth worldwide with 155 billion barrels of recoverable oil reserves, after Venezuela, Saudi Arabia, and Canada.

With 34 trillion cubic meters of natural gas reserves, Iran has the world’s second-largest natural gas reserves after Russia.

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