Iranian Deputy Foreign Minister Sadik Kharrazi said on December 7th that Tehran can export 1 million tones a year (20,000 b/d) of crude from Kazakstan through a swap deal.
The deal would see Kazak crude transported to northern Iran for refining and domestic consumption, while the same amount would be sent to a port for export, eliminating the necessity of new export pipelines.
Kharrazi said that: “Iran is capable of taking over a million tones for refining at the Tabriz refinery and then giving the same volume of oil to our Kazak partners at the Gulf.”
The crude would go by ship to the northern Iranian port and then be piped to Tabriz.
Kharrazi said that Iran would be able to swap up to 5.5 million tones a year (110,000 b/d) by 2003. In 1996, the two countries signed an agreement under which Kazakstan will swap up to 6 million tones per year by 2006 through Iran.
Exporting Caspian crude through Iran is considered the cheapest method, since it would travel a shorter distance than other options, including the U.S.-favored Baku-Ceyhan pipeline.
Tehran and Astana have also agreed to resume discussions on the division of the Caspian Sea.
The sea has huge oil deposits, but the lack of agreement regarding the division of the Caspian among the five bordering countries has prevented the development of some of its reserves.