Iran Taps China For $2.7bn Abadan Refinery Upgrade

Iran has started work on an upgrade to its largest refinery. Korea has already stumped up $12bn of downstream funding; this time it’s China’s turn to pay.

Iran’s state refiner NIORDC on 6 February began preparatory work for a $2.7bn upgrade of the aging Abadan refinery in the country’s southwestern oil heartland which will reduce fuel oil output while raising gasoline and gasoil production.

Iran aims to hike its crude and condensate processing from the current 1.86mn b/d (from nine plants – see map) to 3mn b/d during the 2016-21 term of its sixth five-year development plan. With cash tight to carry through this ambitious program, deep-pocketed Asian state banks and credit agencies are proving key.

Chinese state downstream giant Sinopec is slated to carry out the upgrade work at Abadan and will sign a final contract to this effect later this month. Chinese state export credit insurer Sinosure has already opened a $1.3bn line of credit for the Abadan upgrade and is expected to complete the funding with a second. (CONTINUED - 773 WORDS)