South Korean Firm Signs $4b Iran Refinery MoU

South Korean Firm Signs $4b Iran Refinery MoU
South Korean Firm Signs $4b Iran Refinery MoU

The National Iranian Oil Company and South Korea's Daelim Industrial Co. have signed a memorandum of understanding, worth $4 billion, on upgrading the Isfahan Oil Refinery.

The document calls for reducing the refinery's input of feedstock by 16,000 barrels per day, lowering mazut output by 10 million liters a day with the help of advanced technology as well as boosting daily gasoline production by 8.5 million liters, Mehr News Agency reported.

The agreement was reportedly signed last month, but its details were not released.

Moreover, the initiative will not only help increase liquefied petroleum gas output by 2.1 million liters per day but will also improve the quality of oil byproducts to meet European emission standards.

Plans have been made to develop the project under an engineering, procurement, and construction contract to be financed by the Isfahan refinery, National Iranian Oil Engineering Construction Company and South Korean banks through Daelim.

Financing is expected to take between 9-12 months, but plans are underway to start part of the operations before the financing is approved to speed up the work, according to Hamid Sharif-Razi, head of NIOEC.

An unnamed Chinese company is also expected to help improve efficiency and enhance crude processing in Abadan Oil Refinery.

The Abadan refinery project includes upgrading the infrastructure of what was once the world's largest refinery, as well as construction of a new unit with a processing capacity of 210,000 barrels per day.

The new plant will reportedly be built on the site of the main refinery and will include several units for diesel, distillation and gasoline production.

Iran has a daily crude processing capacity of between 1.6 million to 1.8 million bpd, but plans call for raising the volume to 3.2 million barrels by 2021.