Iran to build new refinery

Source: Tehran Times 6/1/2006, Location: Asia

Iran is set to build a 120,000 barrel-per-day (bpd) refinery by 2009 to process its low-quality sour Sorush and Noruz crude as the OPEC member works to double refining capacity by 2011, an Iranian official said. A plan by the Oil Products Export Development Fund of Iran to oversee construction of the refinery has been approved by the government, Pedram Soltani, managing director of the Fund, said after a seminar in Singapore.

“This will be the first fully private refinery. Work should start in not more than six months and we are hoping that we can finish it in two years,” Soltani said.

Engineering contracts have yet to be awarded. Iran has been struggling to find takers for the heavy-sour crude produced at its Sorush and Noruz fields, which pump up to 190,000 barrels a day (bpd) of heavy-sour crude with a high-sulfur content and yielding lower-quality products.

The fields came on stream over the past two years, but the national oil company has been forced to charter tankers to store the oil due to a dearth of buyers, sources have said.

The Fund of Iran is a consortium of 61 oil products producing and exporting companies from the private sector.

Soltani also gave some details on Iran's plans to almost double its refining capacity by 2011 in an attempt to sate fast-growing local fuel demand and curb gasoline imports.

Iran is a major importer of gasoline, burning through about 60 million liters of the auto fuel a day, almost half of which is imported. “The main goal is to increase gasoline production to the domestic market,” Soltani said. He told the seminar that Iran hoped to expand its refining capacity to 2.126 million bpd by 2011 through an ambitious $13.7 billion program. He put current capacity at 1.122 million bpd, although others peg it closer to 1.5 million bpd.

“All projects are part of the ministry of oil and almost all will be launched within a year,” Soltani said.

The plan calls for the construction of two new refineries at Bandar Abbas, a 360,000-bpd gas condensate refinery and a new 180,000-bpd refinery for heavy crude oil. The existing 232,000 bpd refinery at Bandar Abbas will also be expanded. Other existing refineries will also be upgraded, including the Arak refinery, which will see its throughput raised from the present 150,000-170,000 bpd to 250,000 bpd, Soltani said.


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