9mb/d Crude Oil Loading Capacity

Iran Oil Terminals Company (IOTC) acts on behalf of National Iranian Oil Company (NIOC) for Iran’s oil exports. IOTC also completes Iran’s oil production-export chain. Currently, 93% of Iran’s crude oil exports are handled via Kharg oil terminal with the rest being exported via Neka and Mahshahr terminals. All gas condensates produced in Iran is exported by IOTC via Assaluyeh oil terminal.

Iran Petroleum has interviewed Pirouz Mousavi, CEO of IOTC, on Kharg and other oil terminals handling Iran’s oil and gas condensates exports.

Q: Would you please first talk about IOTC activities in the aftermath of the implementation of the Joint Comprehensive Plan of Action (JCPOA)?

A: Following the entry into force of the JCPOA (the official reference to Iran’s nuclear agreement with world powers) and the subsequent removal of sanctions, Iran has concentrated on its oil exports. The Iranian Ministry of Petroleum plans to bring its oil production, exports and swap to the pre-2005 level, i.e. before the sanctions were imposed. To that end, IOTC has made the required arrangements to move towards materialization of these objectives in order to fulfill the petroleum industry’s obligations to the international community. In order to reach its oil export objectives, IOTC has made precise and competitive planning so that Iran’s sustainable oil production and exports to world markets would be guaranteed. Today, due to limited capacity of storage in Iran, the country’s oil production largely depends on sustainability in oil exports. In the light of insistence by Iran’s petroleum minister [Bijan Zangeneh] for a 1mb/d oil production and export hike during six months following the implementation of JCPOA [last January], IOTC has severely focused on the materialization of this issue. But we have met our targets much earlier than the determined date, while market analysts did not expect it. Today, the amount of oil supplied by oil fields to Kharg Island is not much different from the amount delivered during years before the sanctions were imposed. With such preparations as reconstructions and renovations at jetties, power plants and oil storage tanks we have managed to stabilize Iran’s oil exports in the post-JCPOA era.

Q: You just spoke about the infrastructure for sustainable crude oil exports. Would you please provide more details? 

A: Before the sanctions [were imposed], Iran’s crude oil storage capacity had declined to 19 million barrels. Therefore, immediately after removal of the sanctions, the overhaul of ageing tanks was placed on the agenda as Iran’s oil exports were set to increase. Meantime, in parallel with renovation of ageing storage tanks, we accelerated the construction of new ones with a capacity of 4 million barrels. At the moment, Iran’s oil storage capacity stands at 28 million barrels. Furthermore, in collaboration with the private sector, a group of oil storage tanks with a capacity of 10 million barrels is expected to be delivered to us soon. Then, Iran’s oil storage capacity will reach 38 million barrels, which we can say is in compliance with international standards. Until recently, IOTC owned 10 tugboats. Two tugboats have been added to its fleet, while as many tugboats have been rented. Six loading berths are active in the eastern jetty and three others in the western jetty.

Last month, IOTC managed to smash its own record for transfer. By simultaneous transfer to 9 oil tankers in the jetties and to an oil tanker through ship-to-ship method we managed to set the new record. An outstanding feature of Kharg oil terminal is its reference lab that determines the quality of crude oil delivered to customers. This lab serves as reference and its reports are reliable. This center, which is equipped with specialized and experienced forces, analyzes the quality of crude oil. It is also able to export technical services to other countries in the region.

In 2010, only four loading berths were active at Kharg terminal. But today, thanks to renovation and overhaul projects, all berths at this terminal are active.

Q: Given Iran’s petroleum industry development plans in the upstream sector and the planned export of more than 5 mb/d under the country’s Vision Plan, does IOTC have any other projects on agenda?

A: Given the application of modern technologies to loading arms and the issue of environment, we are focusing on these two issues. Currently we are cooperating with Tehran Academic Center for Education, Culture and Research on these two domains and also application of new technologies to reservoirs, decontamination of oil-polluted soil and preventing the release of polluted water into sea. This company managed to obtain green certificate after having implemented environmental projects. We also plan to use automatic systems for removing oil and sludge from contaminated soil.

Q: Given the implementation of JCPOA and political overtures, have you had any talks with foreign companies on using cutting-edge technologies in different sectors?

A: Today, a major need for Iran’s petroleum industry is to attract foreign investment. This industry needs $50 to $60 billion in annual investment. IOTC is no exception in this regard. We hope to witness the presence of foreign companies and investors in Iran after finalization of the new model of Iran oil contracts. As part of the petroleum industry, we have also held talks with foreign and European companies on new technologies and environment.

Q: Now given the possible entry of foreign companies into Iran’s petroleum industry, what’s your plan for supporting Iran’s knowledge-based companies?

A: Over the past four years, IOTC has had a domestic approach in equipment supply. For the first time, ship-to-ship operation carried out in the Persian Gulf by relying only on our domestic potentialities. For this project, we have engaged knowledge-based companies and centers in 13 provinces in Iran to be able to indigenize tugboat engines. Meanwhile, in cooperation with the Academic Center for Education, Culture and Research, we are developing crude oil loading arms for the first time in the Middle East. These domestically manufactured arms, along with master meter provers, are to be installed at Jetty No. 10 of Kharg terminal. Domestic manufacturing petroleum industry equipment is the way that must continue with the support of the petroleum industry subsidiaries.

Q: in what sectors is IOTC willing to cooperate with foreign companies?

A: New measurement systems and new technologies in the management of storage tanks, safety, environment and loading arms are the sectors in which we would negotiate with foreign companies for cooperation. We have so far reached good results with Dutch companies in this regard.

Q: How much of the current 28-million-barrel crude oil storage capacity is operational? 

A: We are currently using only 11 million barrels of this capacity and the rest is empty, but ready to be filled.

Q: How much is the current capacity of Iran’s oil exports?

A: Sometimes, due to the congested navigation of oil tankers at Kharg terminal and bad weather conditions, exports are disrupted. However, we face no problem in this regard given the 9-million-barrel capacity of this terminal and the skilled manpower. This record has recently been set and we managed to export 9 million barrels of oil in a single day. So, whenever it is necessary, IOTC is ready to utilize all its jetties and potential to export crude and /or products.

Q: What about Iran’s gas condensate exports?

A: As you know Iran started exporting gas condensate with a single-point mooring (SPM) in the early 2000s after South Pars [gas field] development phases became operational. Today, new phases of South Pars have become operational and are exporting condensate with three SPMs. This figure will increase soon after Phase 19 of South Pars has been launched. Of course, I have to recall that Iranian petroleum industry managers wish to bring down gas condensate export to zero so that this valuable hydrocarbon substance would be processed in refineries inside the country.

In compliance with the policies of Resilient Economy, the bulk of gas condensate produced at jointly owned South Pars gas field is [planned to be] treated at Persian Gulf Star Refinery (360,000 b/d), Siraf refining park (480,000 b/d) and petrochemical plants to be converted into downstream products like gasoil, gasoline and naphtha in conformity with euro-4 standards. But before the launch of these plants, gas condensate will continue to be exported by SPMs.

Q: One of Iran’s policies about crude oil export has been to shorten the distance for clients. To that effect, Iran is launching Jask export terminal to diversify its exports. What are the latest developments about this terminal?

A: Yes, that’s true. At present, 5,400 ha of land has already been allotted to this project. Basic studies have been conducted. According to plans, alongside petrochemical and refining facilities, crude oil storage tanks with a capacity of 10 million barrels would be built in Jask area. Also by installing an SPM at Jask area we will be able to export oil via Oman Sea. We are currently choosing an investor who will be most probably a foreign investor. Furthermore, in cooperation with National Iranian Gas Export Company, facilities will be also built for exporting gas to Oman.

Q: When will we witness crude oil swap resumption in northern Iran?

A: Crude oil swap between Iran and Caspian Sea littoral states will be resumed via Neka oil terminal. According to plans by the Department for International Affairs of NIOC, contracts for crude oil swap have been finalized and this terminal will soon start its work. With the energy diplomacy applied by the 11th administration of Iran, lots of efforts have been made for providing the infrastructure for the implementation of this project. Over the past two months, Neka oil terminal has received many international certificates. This terminal is now able to swap 150,000 b/d of oil. According to plans, with the development of this terminal and an increase in the draft and storage capacity, Iran would be counting on swapping 500,000 b/d of oil. I have to recall that Neka oil terminal development project would be a good opportunity for investment in Iran by foreign companies.

Q: One of the important issues which Iran’s Ministry of Petroleum has focused upon and international companies have been paying attention to has been the issue of social responsibility in oil and gas zones. How does IOTC deal with this issue?

A: IOTC believes that it will be able to fully implement a project when local people and residents could enjoy an acceptable level of social welfare and cultural services. In that case, we can count on their contribution to the implementation of the project. In Kharg Island where it has a record of decades of oil production and export, IOTC has managed to provide good and proper services to local residents. For instance, we can refer to the construction of hospital, ferry with 50% discount in fares, low-price fresh water and electricity supply and free transportation of people’s needs on ship, and modern collection system of garbage and waste. In the light of their social responsibilities, oil companies pay due attention to this issue. 

By Hamid-Reza Shakeri-Rad 

Courtesy of Iran Petroleum Monthly