TEHRAN - Iran’s Bank Tejarat has committed to providing finances required for a major fuel pipeline project in the country’s south as part of a contract signed with the Iranian Oil Ministry.
Oil Ministry’s news service Shana has reported that the contract on financing the Pars Fuel Pipeline had been signed earlier in the day between the ministry’s fuel department (NIORDC) chief Jalil Salari and CEO of Bank Tejarat Hadi Akhlaghi.
The pipeline is aimed at easing a potential fuel shortage in Shiraz, the largest city in southern Iran. It will carry fuel from pumping stations in Mehraran located near the Persian Gulf Star Refinery via storage houses in Fasa to Shiraz over a distance of more than 400 kilometers.
The 14-inch pipeline will be capable of transferring 73,000 barrels (12 million liters) per day of fuel, said the report by Sahana, adding that works on the project will kick off at the start of the next calendar year in late March and will continue for four years.
Pars is the second major fuel pipeline project awarded by the NIORDC this year. In January, Iran’s Bank Mellat won a contract for Tabesh pipeline, a 948-kilomter project that is aimed at transferring 24 million liters (150,000 barrels) per day of fuel from major refineries near the Persian Gulf to consumption centers in Iran’s east.
There was no information about the investment needed to finish the Pars Fuel Pipeline although estimates suggest it could cost more than $200 million.
The project was awarded on Sunday in the presence of Iranian ministers of oil and finance, said Shana, adding that Iranian government will also contribute to funds needed for the project.
Iranian Petroleum Minister Javad Owji says the ministry has signed investment agreements worth 15.6 billion dollars in the past six months.
In a tweet, Owji said these include 45 agreements and memoranda of understanding for investments in the fields of development of oil and natural gas fields, gathering of oil field flares’ gas, construction of transfer pipelines and improvement of refineries, among others.
The minister further stressed that 4.5 billion dollars of the investment will go into development of oil and gas fields by Iranian and foreign companies.
Owji said his ministry is also eyeing an agreement with a consortium of Iranian banks to fund the development project of one of the major oil fields and its downstream industries.
Iran has the largest combined reserves of hydrocarbons in the world with 33 trillion cubic meters of proved extractable natural gas and over 160 billion barrels of proved extractable crude oil.