Refinery in NW Studying Development, Financing Options

The refinery’s second phase will be completed in three years.The refinery’s second phase will be completed in three years.

Iran's Roham Refinery complex in East Azarbaijan Province is in negotiations with an unnamed Austrian company on developing its second phase, head of the board of the refinery said.

“Negotiations are underway with the foreign company on using its license as well as finance to build the refinery’s second phase with the capacity to process 50,000 barrel of oil per day,” Abdolrasoul Mirzaei was quoted as saying by IRNA on Friday.

Roham Refinery’s first phase, with an output of 300,000 tons of bitumen annually, was officially launched this week. It was implemented by domestic finance worth $15 million.

The complex has offices in Armenia, Georgia, the UAE, Oman, and China and plans to open offices in Tajikistan and Turkey.

Mirzaei is of the opinion that advanced European technology in construction of the refinery will contribute to the production of oil byproducts with higher value-added.

The project needs $450 million in investment, part of which will be funded by foreign investor(s).

“Financing will also be available by issuing bonds in the capital market,” Mirzaei said.

Based on laws and regulations, the refinery is allowed to attract up to 30% of the finance for its 2nd development phase—which is expected to be completed in three years—by issuing bonds, hoping that the process will be over in six months.

  Talks With KRG

Iraqi Kurdistan may supply 100,000 barrels of oil per day to Iran in a swap agreement in the near future, Mirzaei said, stressing that the deal would secure crude oil supplies to Roham Refinery.

According to reports, due to low refining capacity in Iraqi Kurdistan, the bulk of its crude oil is exported.

The region has recently put forward a proposal based on which its oil would be exported via Iran under a swap agreement.

One of the options is to receive the region’s oil to be used in Iranian refineries in the western regions and deliver the equivalent crude to the target countries via Iran's southern oil terminals.

Ali Kardor, managing director of National Iranian Oil Company, earlier said that the state-run company has conducted negotiations with the Kurdistan Regional Government on oil exports, underscoring that the autonomous region has expressed interest in such deals.

“We should determine whether or not it is profitable for Iran. Kurdistan’s oil mostly goes to East Asia, which also are Iran’s traditional buyers. It should be seen if the plan affects Iran’s market share,” he noted, stressing that the two sides have not yet gone into details.   

Iran is also in talks with the Caspian Sea littoral states to resume oil swap, which, if fulfilled, will raise Iran’s daily swapped oil to 500,000 barrels.