The new pipeline will be 948km long. Credit: Arulonline from Pixabay.

The National Iranian Oil Refining and Distribution Company (NIORDC) has signed a memorandum of understanding (MoU) with local private lender Bank Mellat, to finance the construction of a strategic oil pipeline.

The 948km-long pipeline is planned to be built with an investment of approximately $425.1m (€372m). The project will also involve the construction of three terminals and two pump stations, according to the news agency Shana.

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The pipeline will have the capacity to transfer 150,000 barrels per day of petroleum products from Rafsanjan in the Kerman Province, to Mashhad in Khorasan, Razavi.

Once complete, the project will serve as a strategic asset in ensuring the availability of a sustainable fuel supply in the east and northeast provinces.

It is also expected to reduce fuel consumption and transportation costs while facilitating petroleum exports to eastern neighbouring countries.

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Established in March 1991, NIORDC manages the refining and distribution of oil products. It is one of the four main companies of the Iranian Ministry of Petroleum.

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NIORDC manages and supervises the activities of its subsidiaries which include the National Iranian Oil Products Distribution Company, the Iranian Oil Pipeline and Telecommunication Company, Abadan Oil Refining Company, Imam Khomeini Oil Refining Company, and the National Iranian Oil Engineering and Construction Company.

Iran has also launched the first phase of a super-heavy oil refinery on the southern island of Qeshm.

The new plant will have the capacity to convert 35,000 barrels per day of super-heavy crude oil into different products such as naphtha, bitumen, diesel and light oil, reported the Tasnim News Agency.

In November 2021, Iran announced its plans to increase its oil production levels to five million barrels per day.