Iran lets contract for Esfahan refinery project

Esfahan Oil Refining Co. (EORC), a subsidiary of Iran's state-owned National Iranian Oil Refining & Distribution Co. (NIORDC), has issued a letter of agreement (LOA) to Daelim Industrial Co. Ltd. of South Korea for execution of a modernization and improvement project at EORC’s 375,000-b/d refinery in Esfahan City, Esfahan province, about 400 km south of Tehran.

As part of the late-2016 LOA, Daelim will provide engineering, procurement, and construction services for an upgrading project designed to boost the refinery’s production of clean fuels, Daelim said.

Alongside EPC services, Daelim also will be responsible for procuring financing for the refinery revamp project.

Following start of construction, the upgrading project will take about 48 months to complete, the service provider said.

Daelim, which will formalize its agreement with EORC by the end of January, estimated total value of the contract at more than 2.3 trillion won.

The Esfahan project award follows Iran’s earlier call to international investors to help revitalize the country’s refining sector in the wake of sanctions relief that began in mid-January 2016 (OGJ Online, Jan. 26, 2016).

While NIORDC already completed a series of capacity additions aimed at boosting the quantity and quality of fuel output at its Esfahan refinery that included a 62,000-b/d naphtha treater, a 32,000-b/d continuous catalytic reformer (CCR), and 27,000-b/d isomerization unit, the state-owned company recently announced plans to move forward with another round of projects at the plant to further expand capacities for clean fuels production as well as crude processing (OGJ Online, July 4, 2016, p. 56).

In October 2015, NIORDC’s plan for Esfahan included addition of the following unit capacities: crude distillation, 120,000 b/d; kerosine hydrodesulfurization, 27,000 b/d; gas oil hydrodesulfurization, 99,370 b/d; hyvahl, 81,000 b/d; residual fluid catalytic cracking, 91,290 b/d; RFCC gasoline treating, 51,477 b/d.; LPG, 9,819 b/d; LPG merox, 23,728 b/d; propylene recovery, 23,728 b/d; H2 production 1,429 tonnes/day; H2 production 2,429 tonnes/day; and sulfur recovery, 650 tonnes/day.

Contact Robert Brelsford at rbrelsford@ogjonline.com.

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