Tehran, Manila Discuss Oil, Petrochemical Ties

EghtesadOnline: Iran and the Philippines explored ways to expand oil trade and embark on petrochemical joint ventures in a meeting between Oil Minister Bijan Namdar Zanganeh and Jose De Venecia, special envoy of Philippine President Rodrigo Duterte, in Tehran on Tuesday.

News ID: ۷۷۹۵۴۹

03 October 2017

According to the Oil Ministry's official news service Shana, the talks were centered on purchasing crude oil from the National Iranian Oil Company to provide the Philippines' under-construction refinery with its much-needed feedstock.

Reportedly, the Philippines National Oil Company is eying Iranian oil supplies to meet part of the demand for its new refinery with a processing capacity of 400,000 barrels per day that is being built by China Petroleum and Chemical Corporation, known as Sinopec, Financial Tribune reported.

Pointing to the meeting between Pedro Aquino, a member of PNOC board of directors, and Zanganeh, De Venecia, former speaker of the House of Representatives of the Philippines, said, "Plans are in place to buy 250,000-260,000 barrels per day of oil from NIOC as soon as talks come to fruition."

The prospective refinery will have the capacity to process different oil grades, including Iran Heavy and the country's lighter oil blends, he said, speculating that the complex will be built in three years at an estimated cost of $3 billion.

Commenting on PNOC's interest in joint oil and petrochemical ventures in Iran, the official said PNOC, a former customer of NIOC, is planning to play a more active role in Iran's upstream and downstream initiatives, as the OPEC member has long-term plans to increase hydrocarbon exports.

Manila halted oil imports from Tehran in 2012 following the imposition of tougher restrictions on Iran's trade and banking sectors.

On PNOC's ongoing negotiations with other oil giants, De Venecia said the company has already signed a contract with Russia's energy company Rosneft to import 4 million barrels of oil per month and talks are underway with Royal Dutch Shell Plc and NIOC to provide rest of the feedstock.

According to Shana, NIOC signed a memorandum of understanding in November with Pergas Consortium, a group of international oil and gas companies, to study two oilfields in the southern province of Khuzestan.

"PNOC is a member of the consortium weighing up investment in a liquefied natural gas plant in Iran with a 2-million-ton annual output capacity," De Venecia said.

Highlighting Manila's sustained efforts to do away with coal-fueled power plants and replace the environmentally-unfriendly feedstock with cleaner energy sources, namely LNG, the official added that Philippine energy officials believe that Iran can provide their power plants with the much-needed LNG as it has the world's largest gas field—South Pars Gas Field—off the Persian Gulf.