Siraf, Largest Private Project in Iran Petroleum Industry
One of priorities of Iran has been to reduce sales of raw hydrocarbons, particularly gas condensate. Iran is currently exporting the bulk of its condensate without processing and converting them into other products. Iran has made plans to fully convert 1 mb/d of gas condensate produced at South Pars gas field to products destined for export. To that end, 480,000 b/d of condensate would be delivered to Siraf refineries, 360,000 b/d to Persian Gulf Star Refinery, 120,000 b/d to Nouri Petchem Plant and 120,000 b/d to Pars II Refinery, to be converted into a variety of products.
Among these treatment facilities, Siraf is clearly different because it contains 8 under-construction condensate refineries that would be all run by the private sector. Construction of these eight refineries that would treat light crude oil in southern Iran would require foreign investment in the light of insufficient domestic financial resources and the country's economic situation. The Iranian petroleum industry could not account for more than $3 billion in investment by itself.
In order to reduce raw material selling and benefit from private sector's potential in favor of the economy, Siraf refining project was proposed by the Iranian Ministry of Petroleum in 2014 with a total capacity of 480,000 b/d (eight 60,000-barrel-per-day refineries).
This project is the third and the largest gas condensate refinery in the country. Its importance hinges mainly upon Iran's plan to stop selling raw materials and offering a new model of investment by the private sector in the petroleum industry.
This project is located in Siraf area and on 250 ha of land between phases 11 and 13 of South Pars gas field.
The Iranian Ministry of Petroleum has signed contracts with eight different investors for the project and has agreed to supply 90% of feedstock for reach refining facility for 12 years starting from the date of the signature of the agreement.
Ta'min Petroleum and Petrochemical Investment Co. (TAPPICO), Petro Farayand Karkheh Engineering & Development Company, Falcon Naregan Sazeh, Tanavob Co., Namvaran Co., Energy Amin Kasra Co., and RAMPCO Group have been picked as qualified companies to operate Siraf. They are now looking for a foreign partner so that they would afford the project.
Siraf was divided into 8 projects so that each investor would be able to operate one with $300 million.
In the light of the involvement of eight private and semi-private qualified companies in this project, Siraf could portray an attractive project for foreign investors. The project is steered by Siraf Refineries Infrastructure Co (SRIC).
Another outstanding feature which distinguishes this refining project is that it is the first example of cooperation between Oil Development Fund and private investors. In other words, one can say that these refinery projects are the most important test for Iran's private sector to demonstrate its capabilities in the petroleum industry. These oil projects provide a good chance for the private sector to prove its sincerity in response to the government's trust.
Technology Supply with European License
Ali-Reza Sadeq-Abadi, managing director of SRIC, says all required land for the construction of eight Siraf refineries have been allotted to investors. Meantime, the agreement has been signed for the purchase of technology for units operating under foreign license and the package of processing design for hydrogen production, sulfur recovery and granulation, naphtha hydrogenated treatment, middle distillate products' hydrogenated treatment (jet fuel and gas oil) and liquefied gas sweetening has been finalized. These agreements have been signed with Italy's KT, Denmark's Haldor Topsoe and France's Axens. The basic design for this project has been done by Japan's Toyo in partnership with Iran's EIED.
Sadeq-Abadi said that in this project, which hinges on value engineering, intelligent planning and real-time monitoring, is meant for minimizing investment risks.