Iran has long sought to use the potential of its strategic southern coastal region of Makran along the Sea of Oman to expand its oil and petrochemicals sector, diversify its outlets for key crude petroleum exports, which have been concentrated in the Persian Gulf region, and increase its strategic clout.
Currently, Khark, in the Persian Gulf region, is the only oil export terminal in southern Iran. Officials were after an alternative and they went for Jask that would partially shift exports of oil and natural gas out of the Persian Gulf to the adjacent Sea of Oman.
To do this, development projects were defined in Jask in Makran coastal area. The projects include upstream petroleum industry plans, natural gas transportation and distribution pipelines, as well as petrochemical and downstream petroleum industries’ projects. It was also decided that the proposed Hormuz refinery should be constructed in Jask to help increase Iran’s presence in the global market for crude oil products.
All these also called for the construction of terminals as well as reserve tanks for oil and petrochemical products in the area. Expansion of export terminals in Jask, which has access to oceanic waters, would have several benefits, including diversification of crude export outlets and reduction of reliance on the Persian Gulf and the Strait of Hormuz for petroleum exports. These are besides oil clients’ willingness to load crude oil outside the Persian Gulf region.
Jask also has the benefit of proximity to the coastline of Oman. Therefore, establishment of Iran’s largest natural gas export terminal there is among other projects the government is planning to implement in the port city. The project will see the construction of a natural gas pipeline for exports to Oman, while also supplying the needed energy for local industries in Jask.
As part of the plan for development of Makran area, the government is also focusing on Chabahr, which is located nearly 350 kilometers east of Jask, almost at the mouth of the Indian Ocean. The government is planning to turn Chabahar into the new hub for production of petrochemical products through the construction of a series of new petrochemical plants, including 30 downstream industries projects.
The petrochemical city is believed to improve Chabahar’s role as a key industrial and trade hub and speed up Makran’s development. The three-stage petrochemical project is also estimated to increase exports of Iran’s downstream industries products by $5bn a year, after the completion of the first phase. The project, when complete, will have a total production capacity of 23 million tons, 20 million tons of which is earmarked for exports.
But economy is not the only aspect in mind when strategists in the Iranian government talk of the development of Makran area. The region has easy access to open seas through the Indian Ocean. This is not restrained by the tensions the presence of foreign forces in the Persian Gulf and the Strait of Hormuz has created. Iran is also planning to expand military facilities along the Sea of Oman. These include an existing airbase in Chabahar. This is in line with national plans to enhance Iran’s military might and its control over the northern parts of the Indian Ocean.