and the bright prospect that could be envisaged for it, foreign financial instruments are already ready for the financing of this national project, he added.
According to Sadeq-Abadi, small and medium European banks are ready to finance Siraf refineries within the framework of a banking syndicate, while benefiting from insurance cover. European and Asian insurance agencies have conditioned their insurance of the refineries on guarantees from Iran's Ministry of Economy and Finance.
In the implementation of Siraf project, 14 Iranian and foreign contractors are expected to be active. More than 3,000 people will be directly or indirectly employed.
Mehdi Yousefi, CEO of Pars Special Economic Energy Zone (PSEEZ) where the refineries are to be constructed, has said that the construction of these facilities would start soon as Iran's Ministry of Petroleum plans to stop selling of raw hydrocarbon.
Cost-Effectiveness
Once completed, Siraf project will be producing 24,800 b/d of liquefied petroleum gas (LPG), 128,000 b/d light naphtha, 148,000 b/d of heavy naphtha, 29,600 b/d of jet fuel and 149,000 b/d gasoil. The point here is that gas condensate production in the Asia market is around 2.5 mb/d, 1 mb/d of which is exported and the rest is converted into different products. By converting gas condensate to products like naphtha, jet fuel and gasoil in this project, it would be possible to be more active in the market of products which amount to around 50 mb/d. For instance, there is a big market for liquefied gas. Therefore, marketing for the products would be easy. Furthermore, the naphtha which is planned to be produced at Siraf refineries would be used as feedstock for the petrochemical industry; therefore, it could be widely used in this industry. The most important products planned to be produced by Siraf refineries include light and heavy naphtha (58%), gasoil (31%), LPG (5%) and kerosene (6%). Therefore, a total of 89% of products in this project are naphtha and gasoil. This is how the profitability of the project is examined.
Return of Capital in 3 Years
Sadeq-Abadi also said the area chosen for the construction of Siraf refineries has its specific advantages. Construction of refineries in Siraf is estimated to save $1.5 billion. Siraf refineries are located near South Pars gas field. Therefore, there would be no need for laying out pipelines to deliver gas condensate to Siraf refineries. Proximity to sea, no need for the storage of gas condensate and the existence of water pool are among advantages that reduce costs significantly.
Around 250 ha of land (30ha for each refinery) has been envisaged for the project. The lands will be rented to private sectors under 20-year contracts. After expiry, the contract would be renewable upon the agreement of PSEEZ.
According to estimates, the investment made in this project would return in three and a half years. If oil price is set at $80 a barrel, Siraf refineries would give Iran around 26.5% profitability.
The products of these refineries have attractive features for investors. For example, the naphtha produced at these refineries would be fully treated to be used for gasoline production. Moreover, without purification, it could be used by olefin and aromatic production units. In fact, naphtha will be produced at Siraf refining units in compliance with international standards. The jet fuel planned to be produced at these eight refineries will be in compliance with IATA and MIL standards. Siraf's gasoil would be of low sulfur content (maximum 2,500 ppm). This type of gasoil is widely used in many countries. Of course in the development of these refineries, investors would be able to reduce the sulfur content of this type of gasoil to 10 ppm.
Since a full cycle costs too much, these projects were decided to be launched with a low amount of capital and then investors would develop the total project with the profits they gain from the refineries. Otherwise, high costs will dissuade investors from stepping into this project. That is why gasoil is not set to be treated. The first thing investors would have to do for the development of Siraf refinery complex would be to establish a working committee for the treatment of gasoil and reduction of its sulfur content to 10 ppm.
According to estimates, South Pars gas field would be supplying 1mb/d of gas condensate in ten years' time from now. Since the feedstock needed for these eight refineries would total 480,000 b/d, there would be nothing to worry about with regard to the supply of 60,000 b/d of condensate to these facilities for ten years after their startup. Iran's Ministry of Petroleum has agreed to feed the eight refineries for ten years. After that, gas condensate production in South Pars would be falling due to fall-off in the reservoir. However, investors are assured that the bulk of gas condensate produced at South Pars would be shipped to them. Moreover, new gas fields would be discovered or start operation in Iran and the world; and there would be new sources of condensate. Therefore, there is nothing to worry about.