Foreign Partnership in Iran Refineries
Iran's oil refining and distribution industry has regained hope in recent years owing to the entry into force of the Joint Comprehensive Plan of Action (JCPOA). Success in the revival of incomplete projects of the refining industry and success in acquiring a bigger share in the trading of oil products and entry of the country into the club of petroleum exporters after 110 years could be all viewed as the immediate results of the JCPOA's role in Iran's refining and distribution industry. Removal of international sanctions was the most valuable diplomatic gift awarded by the administration of President Hassan Rouhani to the oil industry. After the JCPOA took effect, Iran's oil diplomacy became active and the country managed to sign six agreements worth $11 billion with foreign companies, particularly Asian companies. Meantime, negotiations have been held with companies from South Korea, China and Japan for the financing of the renovation of refineries in Tehran, Bandar Abbas, Tabriz, Abadan and Isfahan.
Today, with the development of gas industry and replacement of oil products with gas in household and industrial sectors, Iran could use petroleum products for export purposes. As the surplus production capacity of fuel oil, liquefied gas and gas oil has increased the export of these petroleum products has seen a significant jump this year. On average, 400,000 b/d of petroleum products including gasoil, fuel oil, liquefied petroleum gas and liquid fuel has been exported to world markets. Furthermore, Iran's gasoil exports have registered a 430% growth this year from the year before, going from 3.5 million liters to 13 million liters.
Construction of new refineries, implementing projects to enhance the output of existing treatment facilities, expansion of infrastructure for pipelines and storage facilities for oil products as well as development of capacities for oil product exports have been the dominant approach in most activities of refining industry in recent decades.
Traditionally in recent decades, National Iranian Oil Refining and Distribution Company (NIORDC) had focused on domestic supply of fuel particularly gasoline and gasoil in the light of the rapid growth of consumption of petroleum products. Ageing refineries in Isfahan, Tabriz, Tehran, Bandar Abbas and Abadan need a total of $14 billion in investment in order to provide products up to euro-4 standard and cut the share of fuel oil production to below 10%.
7 MoUs Signed with Asians
In the aftermath of the implementation of the JCPOA, Iran has signed seven memorandums and agreements with Chinese, Japanese and South Korean companies in the refining and distribution of petroleum products sectors. These agreements are aimed at building new refineries, renovating existing ones and development of their operation in the country.
At present, reducing fuel oil output, building new refineries and improving the process of production of petroleum products in existing refineries constitute the main three quantitative and qualitative plans of Iran's oil refining industry. Iran's oil refining capacity has reached 1.85 mb/d, which will definitely cross 3 mb/d once the aforesaid three plans are materialized.
In a bid to reduce fuel oil production at Bandar Abbas oil refinery, Iran has signed agreements with the two Japanese companies of Marubeni Corporation and Chiyoda Corporation. Furthermore, an agreement has been signed with South Korea's SKS for reducing fuel oil production at Tabriz oil refinery. Apart from these, a memorandum has been signed with South Korea's Daelim in order to improve the production process and reduce fuel oil production capacity at Isfahan refinery. The memorandum signed for Isfahan refinery expands on four