Page 5 - DMEA Week 13 2021

DMEA COMMENTARY DMEA

to the West Karoun station and beyond. managed to find a second way so that they can
Phase 2 is also underway, which will increase export their oil using other routes whenever the
the capacity of the line to more than 1mn bpd. Strait of Hormuz faces danger. Alternative meth-
The wider project will include five pumping ods could be exporting oil through the Red Sea,
stations, two pigging stations and terminals and the Sea of Oman or the Mediterranean.”
20 500,000-barrel tanks with a capacity of 10mn The first ships Jask will service are likely to be
barrels of oil, as well as offshore facilities for Chinese. With S&P Global Platts estimating that
exporting crude oil. Iranian oil production has increased by 190,000
It forms part of a broader move by the Islamic bpd since August, exports to China have also
Republic to increase its capabilities to export ticked upwards. Data from Kpler shows Iranian
oil from facilities outside the Strait of Hormuz, oil and petroleum products exports to China
which has proved to be a flash point whenever rising to nearly 900,000 bpd in March, up from
tensions with neighbouring countries and/or around 400,000 bpd in February.
the US flare up. The objective is to turn Jask into This upward trajectory will continue, as Teh-
“Iran’s key hub of oil exports,” according to Ira- ran and Beijing have signed a 25-year strategic
nian President Hassan Rouhani. At present the accord this week covering bilateral trade, energy,
Kharg Island terminal in the Gulf accounts for infrastructure and military co-operation. Oil
90% of the country’s oil exports. and gas will play a major role in the deal, which
The total cost of the pipeline was anticipated has been in the works since 2016.
to come in at around $1.1bn, but Dehghani said The $400bn agreement was signed in Tehran
in December that the cost had been reduced by on March 27 between Iranian Foreign Minister
around $586mn. Mohammad Javad Zarif and China’s Foreign
In this week’s call with Rouhani he said that Minister Wang Yi, with Iranian President Has-
the savings had been achieved by using domes- san Rouhani thanking the Chinese delegation
tic manufacturers to provide all of the required for standing up to “American unilateralism”.
pipes. Ali Larijani, former speaker of the Iranian
parliament and potential presidential candidate,
SPM installed was instrumental to the deal and represented
Work on export facilities at Jask is also nearing Supreme Leader Ali Hosseini Khamenei in
completion, with Vahid Maleki, senior offshore discussions.
engineer at developer Pars Oil and Gas Co. Ahead of the signing, Larijani said that Iran
(POGC), saying last week that work had been would not be influenced by temporary external
completed to install the first single-point moor- factors. “The Islamic Republic of Iran decides
ing (SPM). independently about its relationship with coun-
The unit has a capacity of 1mn bpd and has tries and it is not, like certain countries, [likely]
been positioned 6 km offshore Jask for loading to change its position with a telephone call,” he
tankers. Installation of the SPM followed the said. Meanwhile, Wang noted that “China’s rela-
completion of the second of two 36-inch (914- tionship with Iran will not be affected by con-
mm) pipelines in February. The two lines will ditions of the day and it will be permanent and
feed the SPM. strategic.”
The port of Jask will also feature an initial With the deal now in place, Tehran and Bei-
20 storage tanks with a total storage capacity jing will work together to increase bilateral trade
of 10mn barrels of crude, with plans in place to by more than 10-fold to $600bn within the next
expand the export infrastructure and storage decade.
capacity to 30mn barrels. It is being developed Despite years of frustration caused by Chi-
over an area of 0.6 square km at a cost of around nese companies dragging their feet on major
$305mn. oilfield developments, Iran is likely to welcome
these firms back to proceedings following the
Strategic benefits deeper disappointment caused by the failure
During the project’s inauguration ceremony, of the Joint Comprehensive Plan of Action
Rouhani said: “What is strategic about this pro- (JCPOA) to bring much-needed investment to
ject is that many countries in the region have the sector.™

Week 13 01•April•2021 www. NEWSBASE .com P5