News ID: 196659
Published: 0346 GMT July 14, 2017

Japanese, South Korean firms to fund Siraf refineries

Japanese, South Korean firms to fund Siraf refineries

A consortium of South Korean and Japanese companies signed agreements to fund and implement a chain of condensate refining projects in southern Iran — a project known as the Octopus of the Persian Gulf.

The agreements were signed between South Korea's Daelim and Hyundai as well as Japan's Chioda — all partners in the project to construct Siraf refineries in Iran's southern province of Bushehr. The combined value of the investments in Siraf could be around $3 billion, IRNA reported.

A majority of the funding — $2 billion — will come from the Export-Import Bank of Korea (KEXIM) as well as the Korea Trade Insurance Corporation (K-Sure).  The remaining $1 billion is to be made available by Japanese financial institutions including Nippon Export and Investment Insurance (NEXI).

The project could lead to a 22-percent growth in Iran's refining capacity and would also raise its production of petrochemicals by 57 percent.

The period of the project would be four years and would fetch Iran $13 billion per annum.

The Siraf refineries project — considered as one of the largest in the world — consists of eight independent gas condensate refineries with the total capacity of 480,000 barrels per stream day (bpsd).

Hydrocarbon condensate feed will be mainly supplied from existing gas refineries in the nearby Assaluyeh energy zone which hosts South Pars Gas Field.

The project is expected to have a daily production of 15,296 barrels of LPG, 120,568 barrels of light naphtha, 167,984 barrels of heavy naphtha, 81,888 barrels of kerosene and 86,680 barrels of diesel conforming to Euro-V specifications.

Earlier in June, Iran's Oil Minister Bijan Namdar Zanganeh in a directive identified Siraf as a top priority of the Oil Ministry underlining that it needed to get off the ground at the earliest.

Preceding Siraf in terms of priorities was the Persian Gulf Condensate Refinery (PGCR) that has already begun early production and is near full completion. Once developed, the PGCR is expected to have a refining capacity of 360,000 bpsd.

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