Kharg Oil Storage Capacity Grows
Over the past decades, Iran has been a leading supplier of oil in the world. It has maintained its presence in international markets and has met its obligations based on quotas set by the Organization of the Petroleum Exporting Countries (OPEC). Although international sanctions have brought about obstacles ahead of achieving its goals, nothing has halted Iran’s crude oil exports to global markets. A review of existing infrastructure in Iran’s petroleum industry, specifically in oil exports, indicates that Iran’s oil exports has regularly and constantly got under way, from production to logistics.
The present report focuses on the activities Iranian Oil Terminals Company (IOTC), highlighting its main activities pertaining to exports and production.
Despite widespread challenges and bottlenecks caused partly by the coronavirus pandemic and international developments pertaining to the petroleum industry and IOTC’s domain of activity, IOTC has benefited from effective and continuous support of Petroleum Ministry and National Iranian Oil Company (NIOC) to accomplish the mission assigned to it in the sectors of crude oil and gas condensate storage and exports in full safety, on time and in compliance with Quality, Health, Safety, Environment (QHSE) obligations and standards.
Nonstop Exports
IOTC is mainly tasked with crude oil storage and exports, and highly contributes to raising foreign currency for the country. Carrying out this task safely, sustainably and with minimum cost has been a major objective sought by this company. Significant activities have taken place to that end, including laying infrastructure at the Kharg oil terminal to receive and store condensate in support of sustainable gas production, exporting crude oil and gas condense based on NIOC policy and figures set by relevant organs without any disruption, and increasing the crude oil storage capacity in the Kharg area by 3 million barrels. This issue has been always taken into consideration for vacating the need for renting any tanker to store oil, which would save on costs.
Meanwhile, offloading gas condensate by using single-point mooring (SPM) in Assaluyeh for the first time in the country and repairing crude oil pipelines using domestic facilities and saving significantly on costs, are among other measures taken to that effect.
Although over the past three years Iran’s petroleum industry has experienced unprecedented sanctions, driving oil exports down, the necessary infrastructure for boosting oil storage has not come to any halt. Therefore, necessary measures were undertaken to increase crude oil storage in the country.
Abbas Assadrouz, CEO of IOTC, has said that following the operation of 45 storage tanks and risk management in Kharg, the crude oil storage capacity has increased by 1 million barrels.
He said this goal was achieved while Iran was under sanctions and the petroleum industry has to respect covid-19 restrictions. “That had doubled our difficulties, but we desperately needed to increase our oil storage capacity. That saved us hard currency as hiring oil tankers would cost too much,” he added.
Continued Oil Flow
Assadrouz touched on the mission assigned to IOTC, saying: “The mission assigned to IOTC has been to assist in continued oil and gas production and constant flow of oil exports. IOTC’s output would be to generate hard currency to finance other activities in the country.”
He said IOTC accomplished its mission of safe storage of crude oil and condensate last calendar year, adding: “In fact, the flow of oil exports continued and never stopped.”
Assadrouz said the success achieved over the past one year was the result of capability, endeavor and commitment of IOTC staff and NIOC’s effective support.
“Last [calendar] year we achieved significant success, some of which are increasing crude oil and gas condensate storage capacity, continued crude oil and condensate exports under difficult conditions, management, storage and export of condensate and products from the Kharg terminal and Assaluyeh for the purpose of supporting sustainable gas production,” he added.
Assadrouz also laid emphasis on preparing infrastructure and making necessary plans in order to urgently increase crude oil exports capacity based on NIOC plans in the current calendar year. “In light of the general policies of the [Islamic] establishment and the petroleum industry in completing the oil pipeline stretching from Goreh to Jask, operations for measuring and exporting crude oil from the Jask oil terminal would be another priority of the company,” he said.
He said that overhaul of the western jetty of Kharg would be another important project envisaged for the current calendar year. “The western jetty of the Kharg oil terminal, which is the largest crude oil export jetty in Iran, can accommodate the largest oil tankers in the world. In this project, in addition to structural renovation, decrepit equipment in the safety sector will be replaced.”
Domestic Manufacturing
The task assigned to IOTC at the national level is unique and no other country is as much active. In light of technological needs and against the backdrop of sanctions on the country, IOTC is required to focus on the supply of commodities and meeting needs in this sector. With such a vision, IOTC has always been a top research entity at the NIOC level and it has managed to conduct key logistics work by relying on domestic knowhow and potential.
One of these projects is the design and manufacturing of the loading arm and operation of a berth in the eastern jetty, which is unique in the country. This loading arm has already been installed and helped carry out more than ten operations. Construction of this arm has cut dependence on foreign companies, saved Iran hard currency and created jobs for educated persons. Its design and manufacturing has been a novelty, and technology transfer has been done in the real sense of the world. Its features include easy maintenance and dual-purpose functionality (loading and, if need be, unloading).
Assadrouz touched on the domestic manufacturing of 309 items, saying: “These items used to be supplied only from abroad by spending hard currency. Now their domestic manufacturing has removed many obstacles and problems.”
He said that most of these commodities were used for technical purposes. “In some cases, due to their monopolized manufacturing and sanctions imposed on them, we hit serious problems.”
“Furthermore, domestic manufacturing of these commodities saved the country about IRR 100 billion. Designing and building electric actuators of industrial valves and snap ring for the crude oil loading arms are some examples.”
He also announced designing and manufacturing of electronic cards for metering system in Kharg and Assaluyeh, saying: “These cards were in fact the heart of the metering system. It was impossible to buy them from abroad and in case of no domestic manufacturing serious problems would be created in this key sector.”
Physical Assets Management
Each industry is required to handle timely maintenance. Speaking about just maintenance belongs to the past. Over recent years, in light of the inclusiveness of the issue and involvement of financial issues, technical inspection, commodity supply and human resources, the issue is discussed under the title of management of physical assets. A variety of activities has been carried out in this sector. Some of them are designing a code for management of physical assets for the first time at NIOC and following up on its implementation, proposing combination of several key projects including emptying pipelines leading to SPM, inspection of pipelines, pigging of subsea pipes, determining outputs for the physical assets management code, conducting corrosion management project for the first time as the Petroleum Ministry pilot in partnership with the Office of Deputy Minister for Corporate Planning, activating numerous projects for physical assets management including purchase, installation and operation of diesel generator, electronic protection in Kharg Island, supply of hoses for SPMs, supply of necessary valves, overhaul of 160 key equipment in jetties, pipelines, reservoirs and power plants, identifying, assessing and risk management of physical assets for continued operation are among the most important plans which Assadrouz highlighted with regard to management of physical assets.
Quality and Productivity
Assadrouz said all activities of IOTC had been designed based on the vision plan sketched out for the company. He said they were being followed up on with regard to the general and specific objectives. The general objectives include enhanced quality and sustainable productivity, increased creativity and sustainable innovation, and enhanced quality of life for the staff. Special objectives include enhanced sustainability, agility and resilience in the IOTC operation, increasing the level of satisfaction of key stakeholders, upgrading the system of physical assets, regular improvement of performance and excellence of IOTC’s operation.
Therefore, by focusing on these objectives and relying on committed and specialized human capital, as well as scientific and sympathetic management, acceptable performance has been experienced in the oil terminals sector in the past one year.
Golden Chapter
Assadrouz said one equipment largely needed in vessels had been manufactured by IOTC and knowledge-based companies.
“Relying on the capability of staff at IOTC and knowledge-based companies, and overcoming obstacles and preparing the ground for the blossoming of knowhow and specialty opened a new golden chapter to further show that unjust sanctions have been overcome and that the petroleum industry needs have been met by domestic specialists,” he said.
“The specialized operation of berthing and separation at the company are being done based on the latest international standards as a mission assigned by Petroleum Ministry and NIOC,” said Assadrouz. He added that an IOTC-owned vessel used in berthing oil tankers and fighting fire and providing other marine services, has been phased out due to problems in the speed control system.
“This ASD vessel had a Z/P propulsion system, which is the latest system in tugboats in the world. It has been developed by Japanese companies,” he said.
Assadrouz said supplying such equipment would be impossible due to unjust international sanctions, adding that no positive response had been received from foreign companies due to unjust sanctions. He noted that since the vessel was out of service, it imposed heavy renting costs.
“Technicians from the directorates of operations, logistics and commodity affairs, in cooperation with a knowledge-based company, found faults and conducted reverse engineering on the control system and electronic circuits and developed the idea for designing the soft drive to control the engine fluctuations,” he said.
Assadrouz: “That saved us heavy costs spent on reparation. Furthermore, daily renting costs were added to the saved costs, which totally saved more than IRR 20 billion.”