Pipeline through Iran cheaper and more direct route to Asia

Jun 09, 1998 02:00 AM

Apr. 9, 1998 According to an Iranian official the sending of oil from the Caspian Sea's vast fields through Iran will be cheaper and more direct than a US-backed proposal to send the fuel through Turkey.
The republics of the Caspian Sea region are expected to have oil reserves of at least 178 billion barrels, second only to the Gulf region.
The nations on the Caspian - Russia, Azerbaijan, Iran, Turkmenistan and Kazakhstan- and several major Western oil companies have been dividing the oil and gas in and around the sea. The companies are expected to decide on a pipeline route in October. It would go into service in 2003.
The US is pressing for an oil pipeline through Turkey that bypasses Iran and Russia.
Azerbaijan, Kazakhstan and Turkmenistan, together with Georgia and Turkey, signed a joint declaration last month supporting the U.S.-backed project.
Three pipelines to bring Caspian oil to the West already exist or are being built, but they are considered insufficient for the area's potential.
Mehdi Nematollahi, a representative of the Iranian Petroleum Ministry, argued that a pipeline through Iran would save $ 1 bn and provide a more direct route for exports to markets in Asia.
The anticipated trans-Turkey pipeline would cost $ 3 bn, but a pipeline through Iran would cost only $ 2 bn, he said. "Present and anticipated demand for oil indicates that most of the Caspian production would go to the growing Asian market," he said.
"This automatically makes the pipeline through Iran to the existing Iranian Persian Gulf oil terminals the best choice."

Source: not available
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