IRAN: OIL EXPORTS TO IRAQ, ARMENIA TO START THIS YEAR, NEW PIPELINE SOON

Farhang-e Ashti, Tehran
17 Jul 07

Text of unattributed report headlined "Ne’matzadeh announced: Iran
to export fuel to Iraq and Armenia this year" published by Iranian
newspaper Farhang-e Ashti on 17 July.

The plan for the construction of an Iranian oil pipeline along three
directions with one million barrels per day capacity is now under
way. The pipeline will have a diameter of 42 inches and will carry
oil over an altitude of 2,500 metres above sea level.

According to an ISNA [Iranian Students News Agency] report, Mohammad
Reza Ne’matzadeh, the managing director of National Iranian Oil
Refining and Distribution Company [NIORDC], speaking at the second
Iran Transit Forum, said: "The Iranian oil pipeline will be located
along the shortest route from Bandar Neka [port of Neka] to Kharg
Island covering a distance of 1,000 km. It will link up with Bandar
Jask, covering a distance of 1,500 km and then proceed towards Bandar
Abbas. The duration scheduled for the completion of the project is
40 months and the implementation of the project will be overseen by
the National Iranian Oil Construction Engineering Company which is
affiliated to the Oil Ministry."

Mohammad Reza Ne’matzadeh outlined some of the other important
programmes involving oil refining and distribution in the future. These
include the construction of an oil pipeline from the Caspian Sea to
a refinery in Tabriz and the shipment of crude oil to a refinery in
Armenia. He said: "With a view to construct a refinery, we are in
the process of conducting negotiations with a Russian company and it
is envisaged that, by building this pipeline from the Caspian Sea,
we will be able to provide the Tabriz refinery with the oil required
to meet Armenia’s needs."

The deputy oil minister announced NIORDC’s plans to provide fuel to
Iraq and Afghanistan and said: "We have reached an agreement in order
to provide Iraq with 5mln litres of fuel per day by utilizing local
transport and shipping companies and by using domestic production
and foreign imports [from] North and South. With a view of meeting
Afghanistan’s fuel needs, we are in the process of conducting
negotiations."

Referring to the extension of future programmes for carrying oil
from the Caspian sea region to the Iranian refineries, Mohammad Reza
Ne’matzadeh said: "We are in the process of expanding and enlarging
the port of Neka. It is scheduled that in the next three years,
by installing more pumps and carrying out drainage operations to
tackle sedimentation, oil tankers with a displacement capacity of
4,000 tonnes and … [ellipsis as received] will be able to anchor
within seven kilometres of this port."

Mr Ne’matzadeh went on to say: "Presently two pipelines, with a
diameter of 3 inches and 3.5 inches, respectively and a capacity of
500,000 barrels are being used to carry oil from the port of Neka to
the refinery in Tehran."

The deputy oil minister, referring to crude oil production capacity
in the Caspian Sea littoral states, said: "At this moment Russia,
producing 9.5m barrels of oil per day and exporting 6m barrels per
day, is the biggest oil exporter in this region. Kazakhstan, producing
1.3m barrels per day and exporting 1mln barrels per day; Azerbaijan,
producing 500,000 barrels per day and exporting 350,000 barrels per
day and Turkmenistan, with a production capacity of 200,000 barrels
per day and exporting 80,000 barrels per day, are among the other
oil-producing states in the region. At the moment, in the states of
the former Soviet Union and the present countries in the region the
volume of production in non-OPEC states is 23 per cent and it is
expected that this figure will rise to 28 per cent by the year 2015.

Except Iran, the littoral states of the Caspian Sea possess 80 per
cent of the oil in the form of proven reserves."

Referring to the shipment of crude oil from the littoral states of
the Mazandaran sea [Caspian sea] to Iran, Mohammad Reza Ne’matzadeh
said: "A pipeline from Kazakhstan and Turkmenistan to Iran will carry
approximately 400,000 to 500,000 barrels oil per day. In the first
phase, Iran’s share of the oil shipped by the pipeline to Neka would
be approximately 63,000 tonnes and out of this about 500,000 barrels
would be delivered to Tehran and Tabriz. In the future, this delivery
would be carried out from Bandar Creek [Creek Port]."

The managing director of NIORDC concluded his remarks by referring
to the increase in the capacity of oil refineries, and said: "It
is expected that by the year 2012 the production capacity of oil
refineries will increase from 1.6m barrels per day to 3m barrels
per day.