NDFI Not Obliged to Fund Siraf Refineries

NDFI Not Obliged to Fund Siraf Refineries NDFI Not Obliged to Fund Siraf Refineries

In the public summon for investment, it has been emphasized that the oil ministry assumes no responsibility for financing the prioritized Siraf refineries, said managing director for comparative planning in the National Iranian Oil Refining and Distribution Company (NIORDC).

Companies can apply for loans from the National Development Fund of Iran (NDFI), but this does not mean that the project can or should solely rely on the NDFI; rather investors must secure financial resources through their own means, Shahabeddin Motaji said. "Investors have to carry out the projects either through application to other funding resources, or with their own funds."

The  NDFI is a sovereign wealth fund, founded in 2011 to supplement the Oil Stabilization Fund. One of the proposed means to obtain financial resources is the investors' obligation to offer at least 35 percent of the projects' shares at the bourse within a year from the day the project is operational, or to accept 30 percent less feedstock, the official was quoted by Shana as saying.

"This is important from a social justice point of view, since it allows everyone the possibility to invest and enjoy the services on offer."

In practice, huge investment projects with substantial capacity take much longer than the projected. One of the reasons for delays in investments is that financial resources are not promptly supplied, he noted.  On supply of water to refineries Motaji noted that if they are built in non-coastal regions around 60,000 cubic meters of water a day will have to be provided from domestic resources, an amount which equals the daily consumption of 275,000 people. However, the exact amount of required water will be assessed in the preliminary design. "If the refineries are built in coastal regions of the Persian Gulf, domestic water supplies will be preserved."

Siraf refineries are the oil ministry's prioritized projects, the funding of which is to be provided through private funds. The ministry had previously called on investors and contractors to join the project. From 54 private firms who bid for the Siraf refineries, ultimately eight contractors will be chosen.

The Siraf project encompasses construction of eight gas condensate refineries in Pars Special Economic Energy Zone (PSEEZ) with a capacity of 480,000 barrels of gas condensate (60,000 for each refinery).

The ministry broke down the large Siraf refinery contract into eight smaller ones to help raise funds for the construction phase.

The total construction cost is estimated at around $3 billion.

PSEEZ was established in 1998 for the utilization of South ýPars oil and gas resources and encouraging commercial activities in the oil, gas and ýpetrochemical industries.