Transmitting such a big volume of petroleum products would need around 17,000 tank trucks. If we assume each tanker 22 meters long, we will be facing more than 374 kilometers of trucks.
The first oil pipeline in Iran was built in 1910 with a capacity of 120,000 tons a year, immediately after Abadan oil refinery was built. This pipeline connected oil storage facilities in Masjid Soleyman to the Abadan refinery.
The pumps installed at this pipeline were steam-powered, which could handle 40,000 b/d. Today Iran can pump 320 million liters a day of petroleum products.
More than a century after the first pipeline was built in Iran, the country's oil distribution industry is handling approximately 123 billion liters of crude oil and petroleum products per year across the country. That is done through 14,000 kilometers of pipeline,186 oil distribution centers, 215 telecom stations and pressure compression installations.
As an industry faithful to refining and exports, the oil distribution industry was launched in coincidence with the startup of the first oil refinery in Iran, and has since not ceased to grow. However, the installations and equipment for oil distribution in Iran are now in desperate need of renovation and replacement.
The overhaul expenses of second-hand machinery, categorized within the framework of capital expenditure (CAPEX), is of high significance for production, refining, distribution, petrochemical and other such activities. Most often, these operations are halted due to overhaul and maintenance, inflicting heavy expenses on companies and Ministry of Petroleum. In the last Iranian calendar year to March 2017, the overhaul of physical assets of petroleum industry (including equipment and installations in the upstream and downstream sectors) were estimated at more than $400 billion.
IOPTC Manages Oil Transmission
The Iranian Oil Pipelines and Telecommunication Company (IOPTC), which is a subsidiary of the National Iranian Oil Refining and Distribution Company (NIORDC), has been tasked with the administration of oil pipelines all over Iran. The main task assigned to IOPTC is to feed refineries with crude oil and distribute petroleum products across the country.
The activities of this sector of petroleum industry are classified and defined based on specific fields, including daily maintenance, preventive and predictive overhaul and technical inspection. Of total investment in development projects, 65% has been earmarked for the supply of commodities and equipment. Therefore, administration of this sector could, to a large extent, contribute to reducing project costs.
Causing dynamism in relevant industries (manufacturing parts and taking measures to manufacture strategic commodities and equipment) will yield such effective results as the materialization of resilient economy, economic, industrial, and technological development, job creation, and development of a national model in the country. One of significant but largely marginalized sectors in Iran's petroleum industry is the system of transmission of energy carriers to points of consumption, production and refining.
Tens of thousands of kilometers of pipeline has already been constructed across Iran. Apart from gas transmission pipelines and pipelines carrying feedstock to petrochemical plants and power plants, some important pipelines pertain to crude oil and petroleum products across the country, which are tasked with providing feedstock to refineries and supplying fuel to the transportation sector. A total of 186 centers of oil transmission centers, installations and pressure compression stations are running round the clock to transmit crude oil to eight refineries across Iran. IOPTC receives petroleum products (like gasoline, kerosene, gasoil, fuel oil and jet fuel) from refineries and import points ,and transmits them to storage facilities connected to pipelines, some power plants, airports and some petrochemical companies. Generally speaking, IOPTC is handling a network with a capacity of transmitting over 123 billion liters of oil products a year through 14,000 kilometers of pipeline.
Eight of Iran's 10 refineries (Bandar Abbas and Lavan excluded) are connected to national trunkline for receiving crude oil. Moreover, eight refineries (Lavan and Shiraz excluded) send their products through IOPTC pipelines across the country.
IOPTC runs 4,500 kilometers of pipeline for carrying crude oil and 9,500 kilometers for carrying petroleum products, 186 oil distribution centers, as well as 293 telecom stations.
Supply of 1.2bn Barrels Crude Oil
Currently, more than 1.2 million barrels of crude oil plus 1 million barrels of petroleum products are being distributed on a daily basis across Iran. That is being done through real-time communications between different units of production, refining and consumption involved.
Since the transmission of cargoes with fixed volume may be carried out in several phases, this figure is really 1.6 mb/d.
In total, distribution of crude oil and petroleum products reaches 330 million liters a day in Iran. That is done by 12 local centers all across the country.
Currently, 66% of total crude oil and petroleum products distribution in the country is being handled by pipelines. In addition to environmental and operational advantages, using pipeline would cost one-fifth of tanker transfer for each liter of crude oil or petroleum products.
Furthermore, IOPTC is tasked with providing services to the petroleum industry's telecommunications network which is as old as the petroleum industry in both upstream and downstream sectors. Telecommunication is among important development infrastructures in every economic and industrial system.
IOPTC is serving as the telecom arm of the fourth largest producer of oil in the world. Offering the most efficacious telecom services and enjoying a high safety coefficient, IOPTC establishes sustainable and safe industrial communications, audiovisual and computer communications, pipeline network as well as handling all communications between the NIORDC and its subsidiaries, between the Ministry of Petroleum and the NIORDC, refineries, distribution centers, fueling centers, oil transmission centers, and some petroleum industry companies.
Focus on Domestic Manufacturing
A major cause of concern for petroleum industry officials in Iran has been the issue of domestic manufacturing and reliance on Iranian manufacturers. The concept of domestic manufacturing partly relies on Iranian entities lying outside the petroleum industry and partly on the potentialities and capabilities of companies affiliated with the Ministry of Petroleum.
Iran's Ministry of Petroleum has so far carried out many activities in this regard, including establishment of self-sufficiency circles, formation of specialized committees supporting domestic manufacturing, and creation of domestic manufacturing research units. Each has also far rendered valuable services.
Over recent years, two specific objectives have been followed up on. First is policymaking for the procurement and domestic manufacturing of commodities and equipment needed by the petroleum industry in all sectors in order to meet the needs of the Ministry of Petroleum's subsidiaries and offshoots, for the purpose of supporting domestic manufacturing and industrial self-reliance. Second is more transparency in the procedures of commodity supply and domestic manufacturing and policymaking for expediting the supply and enhancing the quality of commodities and equipment. To that effect, non-inflationary exit from recession and supporting domestic manufacturing, short-listing ten widely consumed items that could be produced in the country and making arrangements for their domestic manufacturing have been carried out at the Ministry of Petroleum.
Evidently, one of the most important necessities of petroleum industry in recent decades has been the development of domestic manufacturing of strategic equipment for the petroleum industry and reducing reliance on foreign companies in light of political pressures and restrictions. This concern was shared by all administrations; however, the 11th administration was chiefly concerned with this issue and it took major steps to that end. The capacity of manufacturing of important basic equipment needed in the oil and gas industry has experienced significant growth in recent years. Such domestic achievement has been the outcome of a firm move by both consumers and producers of equipment. Widely consumed commodities are identified under '10 Groups of Commodities'. Today, the offshoots of Iran's Ministry of Petroleum, particularly IOPTC, have had good experience of domestic manufacturing which was incredible some 10 or 15 years ago.
This newly traced path gives rise to fresh hope for domestic development. A long and tough road still lies ahead.
Self-Sufficiency in Oil Transfer Equipment Reparation
Some 20 years ago, Iranian manufacturing companies could not produce most of equipment used in the petroleum industry and this equipment was mostly purchased from foreign companies. But today Iranian companies have reached an acceptable position in terms of manufacturing commodities which the petroleum industry needs. The bulk of equipment needed by the petroleum industry, particularly in downstream sector, is manufactured domestically. The time has come now to shift these potentialities towards state-of-the-art technologies. Under the aegis of policies adopted by the Ministry of Petroleum, the largest domestic market for petroleum industry commodities is taking shape.
For instance, in repairing turbines, IOPTC is becoming a leading company. It has since 1994 focused its attention on overhaul and repair. This trend has so far continued incessantly and currently 15 cases of turbine reparation, valued at around $13 million, have been ordered to domestic factories.
This achievement is the result of combination the specialty of this company and its support. For instance, IOPTC has backed Turbine Machine Middle East Co. to become a manufacturer of solar turbines, while more than 15 solar turbines have been renovated. An agreement has been signed with IOPTC for the repair of eight solar turbines. The items used in the overhaul of turbines have been upgraded, as well.
Manufacturing valves, trans-rectifiers and chargers, steel half-pipes, patches and joints, mechanical seals, air hammers, oil transmission pumps, electronic cards and equipment, anti-corrosion materials, turbine washing, turbine fluid, firefighting materials, chemical lubricants, primers, blades, discs, control cards, fuel pumps, drives, electro-hydraulic valves, oil filter and gas turbine air are among achievements of the domestic manufacturing drive.