By Paul Tugwell and Nikos Chrysoloras

(Bloomberg) — Greece is in preliminary talks with Iran to safe pure fuel for native wants and supply a gateway for the Persian Gulf nation to produce gasoline to different elements of Europe, Greek Energy Minister Panos Skourletis mentioned.

Greece produces little oil and virtually no fuel, whereas Iran is a member of OPEC and holds fuel reserves that BP Plc ranks because the world’s largest. The nations agreed in January for Iran to produce crude to Hellenic Petroleum SA and purchase oil merchandise from the refiner. That deal, probably Iran’s first such settlement with a European firm because the lifting of sanctions, opens the highway to cooperation within the fuel market too, Skourletis mentioned in an interview in Athens.

“What’s sure is that Iran wants to start selling its natural gas in liquefied form using ships and is interested in Greece,” he mentioned. The Revythousa re-gasification terminal close to Athens is one potential entry level for Iranian fuel, and a deliberate facility at Alexandroupolis within the north of the nation is one other. Iran is enthusiastic about each websites “for exporting to Europe,” Skourletis mentioned.

Iranian Oil Ministry media officers in Tehran couldn’t be reached for rapid remark.

Diversifying Supply

Greece is hoping that the removing final month of worldwide sanctions in opposition to Iran will assist it diversify its sources of power and improve the European nation’s function as a regional energy-distribution hub. Greece was compelled to import extra liquefied pure fuel and change at the very least one energy plant to utilizing oil for gasoline in 2009, when a dispute between Russia and Ukraine disrupted fuel provides. Iran’s Deputy Oil Minister Amir Hossein Zamaninia mentioned potential power cooperation with Skourletis on Jan. 22 in Athens.

Iran, which presently lacks amenities to export LNG, desires to make use of idle capability at a facility in neighboring Oman to course of uncooked fuel right into a liquefied type on the market, the Iranian Oil Ministry’s information service Shana reported on Feb. 21, citing Alireza Kameli, managing director of National Iranian Gas Export Co. Iran and Oman are negotiating to construct a pipeline to ship fuel throughout the Persian Gulf to the Omani facility, Shana reported. By liquefying fuel, producers can ship it by tanker to distant markets not linked by pipelines.

Regional Pipelines

Iranian firms have expressed curiosity in taking part with Depa, Greece’s state-run fuel provider, in an organization that may construct and run the deliberate floating LNG storage and re-gasification facility at Alexandroupolis, Skourletis mentioned. Expansion of the Revythousa gas-importing terminal will likely be accomplished in 2017, and with sufficient funding, the plant might additionally ship fuel northward to different areas in Europe, he mentioned.

Both amenities will likely be related to 2 worldwide pipeline methods, the deliberate Trans Adriatic Pipeline and Gas Interconnector Greece-Bulgaria hyperlinks, Skourletis mentioned. The market take a look at for the Interconnector pipeline, which can hyperlink the Greek and Bulgarian fuel methods, is because of be completed this month.

“If that shows that the project is viable, it will open the road for the Alexandroupolis facility,” Skourletis mentioned.

Iran can be enthusiastic about Greece’s refineries, he mentioned. The Greek authorities has no plans to scale back its 35 p.c share in Hellenic Petroleum, the nation’s largest refiner, so any buy of a stake might solely occur by way of a non-public investor within the firm, Skourletis mentioned. Paneuropean Oil & Industrial Holdings, owned by the Latsis Group, owns 43 p.c of Hellenic Petroleum, based on the refiner’s web site.

© 2016 Bloomberg L.P