Refining Projects Top Oil Industry Priority

Refining Projects Top Oil Industry PriorityRefining Projects Top Oil Industry Priority

The early completion and operation of semi-finished refining projects top the oil industry's priority list, managing director of the National Iranian Oil Refining and Distribution Company said on Thursday.

"Serious negotiations are underway with Chinese and Japanese enterprises to implement refinery development projects in Iran," Abbas Kazemi was also quoted as saying by Mehr News Agency.

According to the NIORDC chief, Abadan Refinery's development, which needs investment worth $3 billion, is of great importance and a new round of talks will be held with Chinese financiers in the near future.  

"The project is aimed at stabilizing the refining capacity of the complex, reducing the number of environmental pollutants, increasing oil, gas and gasoline production in conformity with Euro-5 standards, reducing production of mazut and decommissioning the dilapidated infrastructure," he said.

The National Iranian Oil Company had given an ultimatum to a Chinese oil company over its procrastination to implement Abadan Refinery's development project.

Kazemi noted that the project was supposed to be undertaken in two phases simultaneously.

Based on new agreements, the two phases will be funded by two Chinese banks in two stages.

"If the Chinese enterprise continues to kill time, it will definitely be replaced by another company," he said.

Kazemi noted that much of the needed fund should be managed by the Chinese company and NIOC would still cooperate with it, but any further delay in fulfilling the financial commitment will definitely lead to the selection of another contractor.

Abadan Refinery, one of the biggest in the world with a production capacity of 400,000 oil barrels a day, is located in Abadan near the Persian Gulf coastline.

Operating as a subsidiary of NIORDC, it produces and processes oil byproducts, including liquefied petroleum gas, naphtha petrochemical feed, regular gasoline, kerosene, jet fuel, gas oil, light fuel oil, lube-cut oil, bitumen and sulfur.

Underscoring the fact that Japanese and Korean firms have shown interest in developing Isfahan's refining complex, the official said, "Fruitful talks have been held with two companies, whose names have not yet been announced, to develop the plan and a preliminary agreement has been signed."

According to the NIORDC chief, Isfahan Refinery's development plan is of great importance and as soon as it becomes operational, a large number of cities and towns located in the vicinity of this province will be supplied with Euro-4 gasoline. Kazemi believes that Iran's policy of purchasing other refineries' stake or building refining complexes overseas is reasonable, as many major oil producers have been following the policy for a long time.

The official noted that negotiations are underway with Brazil, Spain, Malaysia, India, South Africa and Indonesia to construct refineries in these states in cooperation with Iranian experts.

"NIORDC will undertake feasibility and economic viability studies regarding such ventures, though the final decision will be taken by NIOC," he said.

Underlining the advantages of such commercial ventures, Kazemi said, "Building refineries in foreign states will help us not only produce oil byproducts such as gasoline, but also export them to target destinations regardless of distance. The new strategy is aimed at securing Iran's crude supply in international markets for a long time."