Domestic Banks will Fund Refinery Project

Domestic Banks will Fund Refinery ProjectDomestic Banks will Fund Refinery Project

Six Iranian banks are going to fund the $3 billion Bid-Boland II gas refinery project, Persian Gulf Petrochemical Industry (PGPI) Company announced last week.

A consortium, comprising Sepah, Melli,  Tejarat, Mellat, Parsian banks, as well as the Bank of Industries and Mines, has been established to finance the project.

Sepah Bank is to invest $750 million as the head of the consortium; while the remaining banks are committed to invest $350 million each, Shana news agency reported.

By using gas from South Pars field, the Bid-Boland II project is to provide feedstock for Bandar Imam and Gachsaran Petrochemical complexes, which are yet to be built.

The refinery is expected to produce one million tons of propane, 500,000 tons of butane, 1, 5 million tons of ethane for production of ethylene, and 400,000 tons of liquefied petroleum gas (LPG), per annum.

Gas production will increase by 46 million cubic meters once the refinery is built.

In February 2010, the National Iranian Gas Company (NIGC) and  Bank Saderat Iran (BSI) signed a contract on building Bid Boland II, whereby BSI was to allocate $3.3 billion to the projects.

But the NIGC decided in May to dismiss BSI from the project due to the bank’s failure to fulfill its commitments.

After the withdrawal of BSI, the construction of Bid Boland II refinery in Khuzestan Province was transferred to the PGPIC, Shana reported in September.

More than $500 million has already been invested in Bid Boland II.