Tracer Petroleum Corp., Calgary, on Thursday said it has signed a memo of understanding with Iran's Rose Queshm Co. (RQC) to form a partnership to handle crude oil swaps in Iran.
Through the use of oil swaps, crude oil can be imported into Iran from other oil-producing nations in the Caspian Sea area and delivered to refineries in northern Iran. The equivalent amount of delivered oil would then become available for export through terminals on Iran's Persian Gulf coast.
Through these swaps, the Tracer-RQC partnership says it will arrange to import crude from Kazakhstan, Russia, Azerbaijan, and Turkmenistan and will provide payment in kind of Iranian crude delivered from Persian Gulf ports. The Tracer-RQC partnership intends to capitalize on price differentials to make profits.
Under the agreement, the two companies also will import refined petroleum products into Iran; acquire any and all products, services, and equipment for the National Iranian Oil Co. (NIOC); and undertake other significant business ventures in Iran on behalf of Iranian government companies and ministries. RQC has already been awarded these rights by the Iranian government.
RQC is based in Queshm, Iran. Its parent corporation is based in Tehran. RQC and its affiliated companies own interests in over 70 different businesses in Iran, from pipelines to power plants to insurance.
The preparation of final agreements between Tracer and RQC has begun, and will be completed as soon as possible, says Tracer. The final structure of the partnership between Tracer and RQC is still to be determined, but it's likely that Tracer will own a 25% interest in the partnership, either directly or through a new, wholly owned subsidiary.
According to Iranian Petroleum Minister Bijan Zangeneh, Iran is planning to retool its oil infrastructure to accommodate oil swaps, including construction of a $400 million, 240-mile pipeline from the Caspian port of Neka to refineries in northern Iran and to Tehran. This pipeline is expected to transport 175,000 b/d of Caspian crude within 2 years, and ultimately up to 370,000 b/d. The current estimated throughput capacity at Neka is about 40,000 b/d.
Tracer also said NIOC has requested that Tracer prepare and submit proposals regarding three significant petroleum development projects in Iran that Tracer wishes to pursue.