Iran, China eye major refining deal

Iranian and Chinese officials are expected to sign a deal worth USD 3 billion for upgrades to Iran’s refining capacity next month.

Iranian media quoted Abbas Kazemi, long-time managing director of the National Iranian Oil Refining & Distribution Company, as saying the upgrades would centre on the Abadan oil refinery.

“Last week, China officially opened the financing for the plan to fix and improve the quality of the Abadan refinery,” Kazemi said, according to the Mehr News Agency.

Sinopec will reportedly play a key role in the deal. Kazemi said the Chinese company would sign a contract with the National Iranian Oil Refining & Distribution Company on February 18 for participation in phase one of the Abadan refinery enhancement and stabilisation project. 

The expected value of the deal with Sinopec was not disclosed.

Constructed in 1912, the Abadan facility is Iran’s oldest refinery and one of the world’s largest.

Its capacity was 635,000 bpd before it was severely damaged during the Iran-Iraq war in the 1980s. Since the end of the war, the government has been restoring the facility’s capacity, which is currently reported at 400,000 bpd.

In other news, the first Iranian tanker has made a direct delivery at a European port in the post-sanctions era, the National Iranian Tanker Company (NITC) announced on Wednesday.

Cyrus Kianersi, NITC’s managing director, said a company tanker leased to a Spanish oil major had recently docked at the Spanish Mediterranean port of Algeciras.

He was quoted by Iranian media as saying the docking marked the resumption of Iranian crude deliveries to European ports and that the docking took place “after the resolution of insurance, classing, flagging and international certification issues for Iranian vessels.”

NITC Suezmax vessel Sonia loaded in Iran in late 2016 and sailed to Algeciras after passing through the Suez Canal. The tanker has a capacity of 1 million barrels.

Kianeri said two other NITC tankers were en route to the Netherlands