Iran builds 10 million barrel capacity crude oil storage on Sea of Oman

Iranian companies signed a contract Sunday to build infrastructure for the storage of 10 million barrels of crude in the southern port of Jask on a build-operate-transfer basis, which will be Iran's second oil exports terminal, the National Iranian Oil Co. said on its website.

NIOC arm Petroleum Engineering and Development Co. signed the contract with Petro Omid Asia and Omid Investment Management Group. The ownership will be transferred to NIOC at the end of the 15 years.

"The tanks will gather oil from West Karoun, shared oil fields and central oil fields," Managing Director NIOC Ali Kardor told state television.

The storage will also feed refineries to be built in Jask.

Iran aims to raise its oil-product output and sales in the face of US sanctions on its crude exports to avoid capping its oil wells like it did during the previous period of sanctions between 2012 and 2016.

"This company has no plans to cut oil production; and production is continuing at full steam ahead," Kardor was quoted as saying by state television.

"Iran has access to all of its oil money and can use it. We even had an around 40% increase in income from oil exports," he added.

Kardor said Iran would sign an upstream deal with an unnamed "Russian consortium" under its new contract model.

Twenty metal tanks will be built to store light and heavy oil received from a 42-inch, 1,100-km (682-mile) pipeline. The oil will be pumped into future marine pipes and floating buoy mooring facilities for export.

Jask is a port in Hormozgan province on the Sea of Oman. A littoral area of around 5,000 hectares, 65 km west of Jask town has been allocated for oil, gas, refining and petrochemical projects.

The area allocated to the storage facility is around 600 ha and can be expanded for storage of up to 30 million barrels. The contract signed was to carry out the first phase of the major plan. A second phase has been designed to store 10 million barrels.

Jask will receive 1 million b/d of crude from the Goureh oil terminal in the southern province of Bushehr. Iran has been planning to create an oil-export hub beyond the Strait of Hormuz for a long time

source: S & P Global Platts