Iran Signs $3b Refinery Agreement With Asian Consortium

The agreement was signed between executives of Siraf Refining Park and South Korea’s Hyundai and Daelim Corporation as well as Japan’s Chiyoda Corporation at Daelim’s headquarters in Seoul on Thursday, IRNA reported.

It entails the funding and construction of eight new petroleum processing facilities in Siraf by the East Asian consortium. The signing ceremony was overseen by Hassan Taherian, Iran's ambassador to South Korea.

A total of $2 billion will be provided by the Export Import Bank of Korea (KEXIM) and the Korea Trade Insurance Corporation (K-Sure). The remaining $1 billion would be extended by Japanese financial institutions, including Nippon Export and Investment Insurance, Financial Tribune reported.

The four-year project will increase Iran’s refining capacity, currently standing at around 1.8 million barrels per day by 22% and raise its petrochemical feedstock output by 57%.

In January, Tehran finalized an agreement worth $2 billion (2.3 trillion won) with Daelim to renovate and expand Isfahan Oil Refinery, Mehr News Agency reported. Established in 1939, Daelim is one of the largest companies in South Korea.

State-owned National Iranian Oil Refining and Distribution Company also signed a memorandum of understanding with South Korean engineering conglomerate SK Group last year on conducting feasibility studies on Tabriz Refinery’s development plan. Based on the MoU, the refinery's mazut output will be significantly cut in favor of higher gasoline and diesel production.

Aiming at reconditioning Abadan Oil Refinery in the southern Khuzestan Province, Iran has signed an agreement worth $1.3 billion with China Petroleum and Chemical Corporation. The refinery, which was once one of the world's largest, was heavily damaged during the 1980-88 Iraq-imposed war.