Construction of Siraf gas condensate refineries started Monday in the southern Assalouyeh region in a ceremony attended by Vice President Es'haq Jahangiri and Oil Minister Bijan Namdar Zanganeh.
Siraf is the country's biggest refinery project undertaken by private firms and is estimated to cost $3 billion. Companies involved in the construction of the refinery include Tamin Petroleum and Petrochemical Investment Company (TAPPICO), Petro Farayand Energy Co., Falcon Naregan Sazeh Co., Tanavob Co., Namvaran Co., Energy Amin Kasra Co., and the RAMPCO Group, IRNA reported.
Private investors are obliged to offer 35 percent ($1 billion) of the project cost on the Farabourse, Zanganeh said adding that the refineries' feedstock will be reduced if shareholders refuse to offer shares to smaller investors.
Farabourse is an over-the-counter market for securities and other financial instruments in Tehran, which operates under the auspices of the Securities and Exchange Organization (SEO).
Oil sales were undertaken by entities and individuals in the past, but the government's new policy prohibits such transactions by private companies, Jahangiri said at the ceremony, adding that the National Iranian Oil Company is the single authority responsible for crude oil exports.
Although crude prices surged and oil revenues hit record high during the incumbency of previous government, access to revenues from oil exports by the private sector proved to be a "bitter experience" because most of the proceeds were not deposited with the treasury, the senior official said. Recent reports have it that billions of dollars in oil exports by non-state players in 2005-13 (the tenure of former president Mahmoud Ahmadinejad) are still unaccounted for.
Oil revenues in the Iranian year March 2011-2012 reached more than $118 billion, while the figure fell to less than $50 billion this year due to the recent plunge in global oil prices.
Siraf project is the first fully private joint project in Iran's oil sector. Private companies will use their money to build eight processing plants, each with a capacity of 60,000 barrels a day. Siraf will eventually produce about 270,000 barrels a day of naphtha, 140,000 of gasoil, 30,000 of liquefied petroleum gas (LPG) and 40,000 of kerosene. The project is to be completed in three years.
To help reduce construction costs, Siraf Refineries Infrastructure Co. has been established to handle the relevant infrastructure tasks. Refineries will be located in the Pars Kangan region of Pars Special Energy Economic Zone (PSEEZ), between phases 13 and 19 of South Pars gas field.
Gas condensate exports will eventually come to a halt upon completion of the refinery, Zanganeh said, noting that the project is aimed at curbing sale of oil and gas byproducts and use them in local refineries.
Proximity to export hubs, reduction in costs of constructing export terminals and transporting gas feedstock, availability of water from the Persian Gulf and utilization of Assalouyeh power plant are among the advantages of the sprawling Siraf complex.
