Iran will seek international investors for a $3 billion refinery project in the country’s south as the Persian Gulf nation looks to boost sales of its oil and natural gas products in Asia.
The refining complex on Iran’s Persian Gulf coast will seek to raise as much as 80 percent of the capital needed from international partners or financiers, Alireza Sadeghabadi, managing director of Siraf Refineries Infrastructure Co., said in an interview in Tehran. Siraf will issue a tender in two to three months to invite potential investors and partners, with companies and lenders in Japan and South Korea showing interest, he said.
Iran is ramping up its energy industry after international sanctions restricting its access to financing and global oil markets were lifted in January. Since then, the country has boosted oil output to near pre-sanctions levels and raised natural gas production at the South Pars gas field on the Gulf coast. Siraf will produce naphtha, mainly used in chemical plants, from condensate, a liquid oil found in the vast offshore gas deposits.
“The project is based on a decision to turn condensate within the country to products with higher added value and avoid its sale as raw material,” Sadeghabadi said. “Despite anticipated high supply of naphtha, there will be a proportionate high demand for naphtha with its extensive application in plastic-based products.”
The Siraf project will consist of eight plants, each with a capacity of 60,000 barrels a day of condensate. The refineries will start in about three years, before reaching full capacity in four years, Sadeghabadi said. “It can be said Japan and South Korea are the focal points of Asian countries’ interest to invest in Siraf.”
The plants will target Asia’s growing demand for refined oil products and will seek to supply chemical producers in South Korea and Japan. Beyond that, Iran aims to develop its own chemicals industry that will allow it to make more advanced products, such as plastics, that will bring in greater income than raw materials, Sadeghabadi said.
Petrochemical projects planned in Siraf would use naphtha from the refineries, he said. “It is not our aim to export naphtha in its raw form to the market indefinitely and we plan to turn naphtha to final products and export products with more value added.”