Dehloran Refinery to Receive $1.5b Investment

Dehloran Refinery to Receive $1.5b InvestmentDehloran Refinery to Receive $1.5b Investment

A $1.5 billion investment is being made to build the Dehloran gas refinery (NGL 3100) in Ilam Province, western Iran, said Oil Minister Bijan Namdar Zanganeh during Thursday's visit to the petrochemical facilities in Ilam.

Zanganeh highlighted Dehloran refinery as one of the biggest gas projects in Iran and said a new petrochemical plant will be established to provide feedstock for the new refinery, Shana reported.

Ilam will become one of the major petrochemical hubs of the country once the new refinery comes on stream. NGL 3100 will enable Iran to export petrochemical products to Iraq.

Zanganeh stressed that the new petrochemical projects will employ a local workforce as a priority.

  Azar Field Production

The oil ministry is planning to increase extraction from the six Iran-Iraq joint fields and "good progress has been made in this regard," Zanganeh noted.

Oil production in Azar field in south Ilam is due to begin in the fourth quarter of 2014. Two new drilling rigs will be deployed in the field to accelerate production, increasing the number of rigs to a total of seven.

The project which is expected to take more than $1 billion of investment will be carried out by Iranian firms in the form of a buy-back agreement.

Extracted oil from the Azar field will be processed and carried to Khuzestan Province for export and extracted gas will be delivered to Dehloran to provide feedstock for the NGL 3100 refinery.

Production will start with 30,000-35,000 barrels a day and will increase by 65,000 barrels.

Azar field holds 400 million barrels of oil and spans an overall area of 482 square kilometers in southeast of Mehran town in Ilam.

The Norwegian oil and gas company Statoil were in talks for the development of Azar field in 2008, but the firm announced it will not make the investment in Iran following pressure from the US.

At the time the US state department said it would review Statoil's activities to see if it was in breach of Washington's Iran Sanctions Act, which prohibited investments of more than $20 million in Iran's oil and gas sectors.

The US imposed an array of sanctions on Iran to curb the country's nuclear program, but Iran insists its program is not aimed at developing weapons. Iran and P5+1 are negotiating to reach an agreement.

Before assigning the project to the domestic consortium, Iran was negotiating with Russia's Gazprom Company for the development of the Azar field. However, Gazprom was dropped from the project due the company’s failure to meet its commitments.

  Anahita a Top Priority

Zanganeh said the construction of Anahita refinery in Kermanshah Province is a top priority. The project will be built with a fund of $2.5 billion and will become the only crude oil refinery in Iran.

Social Security Organization and the ministry of welfare are the major investors of the project.

Additionally, agreements have been signed with eight universities to carry out research and development (R&D) for the extraction of oil from 58 fields.