Iran's Major Refinery Contracts with Asian Companies

Abbas Kazemi, the CEO of the National Iranian Oil Refining and Distribution Company, stated that Tehran has signed contracts worth $5 billion for the development of existing refineries in Iran with companies from South Korea and China, and a contract worth $3.6 billion is expected to be signed with Japanese companies. According to Mehr News Agency, Kazemi elaborated on the details of these contracts, mentioning the opening of a $1.3 billion credit line for the development and optimization project of the Abadan oil refinery. It is anticipated that the operational execution of this project will officially begin in February of this year with the presence of Chinese oil and energy officials, senior managers from China National Petroleum Corporation (CNPC), and government officials. He stated that the total investment volume for this refinery project is approximately $3 billion and added that the second phase of the Abadan refinery, amounting to $1.7 billion, is expected to be opened by next spring. Upon completion and operation of this project, the volume of fuel oil production at the refinery is expected to decrease from the current 40% to about 20-22%. The CEO of the National Iranian Oil Refining and Distribution Company also mentioned that a $2 billion contract for the development of the Isfahan oil refinery has been signed with South Korea's Daelim Company. Additionally, negotiations are ongoing with three Japanese companies: Marubeni, Chiyoda, and Mitsui, and it is expected that the contract for this massive refinery project worth $3.6 billion will soon be finalized. Iran has overall planned to invest $14 billion in its six old refineries to both raise the quality of produced products to high standards like Euro 4 and increase the share of high-quality products such as diesel and gasoline while reducing the share of lower-value products like fuel oil from the current 24% to 10% in the final output of refineries. Iran also has several new major refinery projects named 'Persian Gulf Star, Siraf, Anahita, and Bahman Genu,' aimed at adding about 1.29 million barrels to its refining capacity and reaching 3.1 million barrels per day within the next five years. This official noted the launch of the first gasoline production furnace at the Persian Gulf Star refinery, stating that according to the schedule, the first phase of gasoline production at this refinery, with a daily production capacity of 12 million liters, will be operational by spring 96 (Iranian calendar), which would make Iran part of the countries exporting gasoline. Upon completion of this project, a total of 360,000 barrels per day will be added to Iran's oil refining capacity. Iran is currently a gasoline importer. According to Abbas Kazemi, about 11.8 million liters of gasoline have been imported into the country daily over the past 10 months of the current solar year. However, Iran has joined the ranks of exporters of this high-value-added product since two years ago by reducing diesel consumption in power plants. Mr. Kazemi stated that the current capacity for exporting Iranian oil products (diesel, fuel oil, kerosene, and liquefied gas) has increased to about 500,000 barrels per day, and it is expected that next year, with an increase in excess production capacity, Iran's oil product export capacity will reach 600,000 barrels per day.