four years for an investment of $2 billion. In this project, Daelim would be a foreign partner to domestic contractors and National Iranian Oil Engineering and Construction Company (NIOEC).
China Develops Abadan Refinery
Iran's traditional partner China became more serious in its negotiations and trading cooperation with Iran after the JCPOA entered into force in a bid to preserve Iran's market. China's Sinopec is set to sign an agreement in February for the first phase development of Abadan oil refinery. The necessary letters of credit for this project have already been opened. The project for Abadan refinery's capacity development and stability is aimed at stabilizing the refining capacity of Abadan refinery, supplying products based on euro-5 standards, reducing environment pollution, increasing gasoil and gasoline production by improving production technology, reducing fuel oil production and phasing out decrepit installations and storage tanks. Abadan refinery has currently a production capacity of 400,000 b/d of crude oil, 250,000 b/d of which is refined in three distillation units which are more than 70 years old. There is no problem with the implementation of this agreement and this project would be engineering, procurement, and construction (EPC) one. Relevant engineering activities started several months ago and they are nearing end. The major objective behind the implementation of this project is to enhance the output of the refinery and build a refinery that would be compatible with global standards. Meanwhile, some units at Abadan refinery are decrepit and they will be removed. Fuel oil production will be cut to below 25% and all products of this refinery including gasoline, gasoil, kerosene and liquefied petroleum gas will meet international standards from now onwards. The timeframe set for the implementation of this project is 3.5 years from now.
Japan to Develop Bandar Abbas, Tehran Oil Refineries
Iran's refining industry officials blieve that the most important opportunities for investment in post-JCPOA Iran's oil refining industry is to develop and optimize treatment facilities and reduce fuel oil production. Therefore, senior managers of oil refining and distribution industry in Iran recently announced that agreements were to be signed with two leading Japanese companies for the optimization and improvement of the procedure of production at Bandar Abbas and Tehran oil refineries. Negotiations with JCCP and JGC are near finalization.
Iran to Help Brazil Build Refinery
A memorandum of cooperation was recently signed with a Brazilian company that would result in the construction of a 300,000-barrel-a-day refinery in South America. According to the agreement, the refinery will be fed solely with crude oil. Moreover, the construction of this refinery will guarantee long-term security of demand for Iran's crude oil.
Iran-Brazil trade is currently limited to agriculture and livestock. The two countries have capacity to expand their relations in technical and labor services. The economies of Iran and Brazil are complementary to reach other and they have potential for expanding activities between themselves.
Iranian and Brazilian companies can consider joint projects in the oil and gas sector in order to cooperate in oil and gas trading and construction of refineries and petrochemical plants. The project for the construction of Marayan refinery could be a starting point for further cooperation between the two countries.
Talks with Italy for Shiraz, Tabriz Refineries
Iran has started serious talks with Italy's Eni for the construction of Pars gas condensate refinery in Shiraz with a capacity of 120,000 b/d. Furthermore, during President Hassan Rouhani's visit to Italy, a memorandum as signed for cooperation in major oil and gas projects in Iran. Saipem agreed to renovate and upgrade Pars and Tabriz refineries.
Iran is set to see a 70% growth in its refining capacity after Persian Gulf Star Gas Condensate Refinery (360,000 b/d), Siraf refining park (480,000 b/d), Anahita refinery (150,000 b/d), Bahman Ganou refinery (300,000 b/d) in Jask Port and Pars refinery (120,000 b/d) become operational.
JCPOA Facilitates Oil Product Exports
In the aftermath of the implementation of the JCPOA and the ensuing improvement in the country's processing procedures, Iran has for the first time become a net exporter of petroleum products with a record 400,000 b/d of such products. Today, NIORDC is proving a strong presence in regional market for petroleum products. It exports more than 60 million liters a day of gasoil and fuel oil, accounting for 13.5% of petroleum product exports in the Middle East. If liquefied petroleum gas (LPG) exports are also included, the figure would go higher.
This record has been achieved at a time when the current capacity of the company for boosting exports stands at 500,000 b/d. This target has not yet been achieved due to restrictions in loading and exports. But there has been planning for raising this figure to 600,000 b/d.
In parallel with the National Iranian Oil Company (NIOC), NIORDC has become an important source of hard currency revenue for the country. Selling more than 400,000 b/d of petroleum products to a variety of markets requires access to international maritime and land transportation system, international monetary system, insurance coverage ,and above all trading partner's trust now that Iran's nuclear dispute has been resolved.
Without JCPOA and its ramifications in international trade, Iran could have never achieved the 13% of Middle East petroleum products' exports. When the sanctions were still in force, Iran could not reach this figure because foreign buyers did not interact with Iran. But today, Bandar Mahshahr is facing congestion of oil tankers.
For the first time, Iran has reached a status of sustained petroleum product exports and it faces no restrictions for payments.