Iran Constructing Oil, Gas Refineries; Plans To Sign $8.6 Billion Contracts With China, Japan And South Korea

Iran has started construction of 12 oil and gas condensate refinery complexes, an official at the National Iranian Oil Refining and Distribution Company (NIORDC) said Wednesday, according to the country’s Mehr News Agency. The Islamic republic is also reportedly expecting to sign oil refining contracts worth $8.6 billion with Asian companies in coming months.

Iran is planning to restore its oil and gas sectors after major sanctions were lifted following the nuclear deal between Iran and six world powers — including the U.S. — signed in July 2015.

Arman Moghadam, director of corporate planning and member of the board of directors of NIORDC, noted that Iran needs to improve and refurbish oil refineries in the post-sanction period. He added that the country has a total capacity of 1.73 million barrels operating across Iran at present.

“More than 5,500 petrol, gas oil and compressed natural gas stations are operating in Iran,” Moghadam said, according to Mehr.

Also Wednesday, state-run Press TV reported Iran is negotiating three separate oil refining contracts with China, Japan and South Korea.

“Negotiations have been held with the three [Japanese] companies and the deal for this massive refining project worth $3.6 billion is anticipated to be finalized soon,” Iran’s Deputy Petroleum Minister Abbas Kazemi, according to Press TV.

The country is also expecting sign a $2 billion contract with a South Korean company to boost oil processing capacity at the refinery in central province of Isafahan, Kazemi said. Separately, a $3 billion contract is expected to be signed this month with a Chinese company to develop and improve the quality of the refinery in Abadan city in western province of Khuzestan.

Kazemi also said China has opened a $1.3-billion credit line to fund the plan and another $1.7 billion is likely to be received later this year. Iran also plans to sign contracts worth $14 billion to revive and upgrade the quality of five oil refineries in the country, he added.