Page 6 - MEOG Week 33

MEOG PIPELINES & TRANSPORT MEOG

Iran renews IRENEX focus as

it inaugurates Karoun pipeline

IRAN IRAN this week kicked off the first phase of a IRENEX via Islamic ‘salaf’ bonds. According to
major oil conduit project while announcing the Iranian Securities and Exchange Organisa-
a new means of selling oil on the Iran Energy tion, each salaf contract has an equivalent value
Exchange (IRENEX), only to change its plans a of one barrel of oil, and interested parties may
few days later. purchase between one and 20,000 barrels. Heavy
The pipeline development will move 460,000 crude is currently priced at around $42. Middle
barrels per day and 254,000 bpd of heavy and East Oil & Gas (MEOG) understands that Teh-
light Iranian crude respectively from fields in the ran intends to offer a total of 220mn barrels on
West Karoun oil region in the south-west of the IRENEX via salaf bonds.
country to export terminals along the southern However, over the weekend, IRENEX back-
Gulf coast. tracked, postponing the offering and saying only
A ceremony was held to inaugurate the pro- that an updated schedule would be provided by
ject, which was attended by Farokh Alikhani, NIOC.
deputy director of production affairs at the The Iranian government has witnessed the
National Iranian Oil Co. (NIOC), and Touraj growth in appeal of investment with the Tehran
Dehqani, the managing director of NIOC sub- Stock Market in recent months, which has seen
sidiary Petroleum Engineering and Develop- a 300% growth in its trade at points over the past
ment Co. (PEDEC). year. The TSE has been one of the best bets, while
The pipeline will transport crude from property and the foreign currency markets have
West Karoun to the Omidieh pumping station, weakened.
then on to the Bahregan and Jask terminals for “Gold and the dollar are not the places to
onward export. Crude will be supplied directly be investing. But the stock market and oil are,”
from the North Azadegan, South Azadegan, Rouhani said in a televised cabinet meeting.
Yadavaran and Darkhovin oilfields, while supply “The government is doing everything to control
from North Yaran will be moved to a facility at liquidity and counter oil sanctions ... the plan will
Jofair before onward transportation to the West help the economy and secure revenues for our
Karoun station. people.”
Phase 2 is currently underway, which will In early 2019, an amendment to the Iranian
expand the capacity of the line to more than budget was approved, requiring the Ministry
1mn bpd. of Petroleum (MoP) to offer 2mn barrels per
The conduit is part of a broader move by month of light crude on IRENEX. This came in
the Islamic Republic to increase its capabilities addition to the 2mn barrels of heavy crude oil
to export oil from facilities outside the Strait of and 2mn barrels of natural gas condensates and
Hormuz, which has proved to be a flash point natural gas the ministry was already obliged to
whenever tensions with neighbouring countries supply to the exchange.
and/or the US flare up. Crude was first offered on the exchange on
In April, Iran began work on an oil pipeline October 28, 2018 as a means of providing a vari-
linking the Gulf port city of Goreh in Bushehr ety of sales mechanisms to appeal to buyers.
Province to Jask on the Sea of Oman. Iranian The first offer was fairly warmly received,
President Hassan Rouhani said at the time that with 280,000 barrels purchased out of the total
the 1mn bpd pipeline would come into opera- of 1mn barrels at a price of $74.85. However, the
tion in March 2021, allowing crude exports from offerings have had patchy results since.™
Jask to increase. “Jask will turn into Iran’s key hub
of oil exports,” he added. At present the Kharg
Island terminal in the Gulf accounts for 90% of
the country’s oil exports.
Of the $1.8bn total project cost, the Goreh-
Jask pipeline is anticipated to come in at around
$1.1bn, with the remainder being spent on the
development of the port. The port of Jask will
feature 20 tanks with a total storage capacity
of 10mn barrels of crude, with plans to expand
export infrastructure.

IRENEX
Meanwhile, NIOC unveiled plans last week
to offer 520,000 barrels of heavy crude on the

P6 www. NEWSBASE .com Week 33 19•August•2020