European Companies Eye Investment in Siraf Refinery

European Companies Eye Investment in Siraf RefineryEuropean Companies Eye Investment in Siraf Refinery

Eight western European companies are keen to invest in Iran's $2.8 billion Siraf oil refinery project, an Iranian official said, as the country ramps up capacity to reduce its dependence on imports.

"Siraf project has been designed for the current situation," Alireza Sadeghabadi, managing-director of Siraf Refineries Infrastructure Co., said, referring to Iran's self-sufficiency drive.

"Of course after the removal of sanctions more foreign companies will be interested in investing in Iran," he said in an interview with Reuters. "We will choose from among eight western European companies that want to be involved," he said, declining to name the companies.

Sadeghabadi said an Asian company, which he would not name, and an Iranian company would work together on certain sections of the refinery.

The Siraf refinery project will have a processing capacity of 480,000 barrels per day and will be completed in 38 months, or just over three years. Eight processing plants would be built by private companies, using their own funds, Sadeghabadi said.

The International Energy Agency (IEA) said Iran's sales of condensate doubled in 2014 to about 200,000 barrels per day (bpd) and contributed to total Iranian oil shipments in April of about 1.3 million bpd.  

However, oil minister Bijan Namdar Zanganeh said Iran would no longer export gas condensates - which are refined into higher-value products - once the refineries start operating.

The Siraf refinery will have the capacity to produce more than 270,000 bpd of naphtha, 140,000 bpd of gasoil, 30,000 bpd of liquefied petroleum gas and 40,000 bpd of kerosene.

Around 60 percent of Siraf’s gas condensate would be turned into higher-value naphtha, which is used to produce plastic-based products, Sadeghabadi said.

"Demand for naphtha is increasing and with the Siraf project we will be able to produce more (naphtha) for exporting to Asian chemical makers," he added. “Iran's plan is to sell more refined products in the long term...which will create jobs in the country as well as helping our economy."