Asian Firms to Implement Iran’s Refinery Projects

Asian Firms to Implement Iran’s Refinery Projects
Asian Firms to Implement Iran’s Refinery Projects

Iran has signed seven memoranda of understanding and contracts with oil and gas companies from China, Japan and South Korea on the construction or development of refineries in the country, managing director of National Iranian Oil Refining and Distribution Company said on Wednesday.

“Three plans on NIORDC’s agenda in the post-sanctions era, which help develop Iran’s oil refining industry in terms of both quantity and quality, encompass reducing mazut production in Iranian refineries, building new refineries and boosting the production process,” Abbas Kazemi was also quoted as saying by Mehr News agency.

Stressing that Iran’s current crude processing capacity stands at  about 1.85 million barrels a day, Kazemi noted that with the implementation of new plans, the country’s refining capacity will exceed 3 million barrels per day.  

“Along with raising the refining capacity, mazut production is also planned to be reduced in the Iranian refineries’ basket of products from the current 30% of the total output to 10%,” he said.

Outlining the main MoUs and contracts sealed with Asian firms, Kazemi noted that to lower mazut output in Bandar Abbas Oil Refinery in the southern Hormozgan Province, Iran has held negotiations with two Japanese companies, namely Marubeni and Chiyoda, and signed a preliminary agreement.

The official, who is also a deputy oil minister, underlined that NIORDC has, in early June, signed an MoU with South Korean engineering conglomerate SK Group on conducting feasibility studies on Tabriz Refinery’s development plan, based on which the refinery aims to reduce mazut output and boost gasoline and diesel production.

The MoU is reportedly worth $20 million but it is expected to reach $200-300 million in the next stages of development.

The refinery has also reached an agreement with Japan’s JX Nippon Oil & Energy Company to undertake other projects.

“Japanese companies have been more active, compared to other Asian and European firms, in talks with Iran for taking over refinery projects,” he added.

According to Kazemi, a similar MoU has been signed with the East Asian country’s Daelim for mazut reduction in Isfahan's refinery.

Lotfali Chavoshi, the refinery’s CEO, told Shana in July that the plan, which also includes process improvement and optimization, will be carried out in a four-year period with an investment of $2 billion by Daelim.

Kazemi underscored that talks have been held with an unnamed Chinese company on boosting Abadan Refinery’s capacity and improving production process.

Chavoshi last week said the Italian oil and gas company Eni has been in negotiations with Iran on financing and building Pars Condensate Refinery in the city of Shiraz in Fars Province, which will refine 120,000 barrels a day upon completion.