Japanese, Korean firms to fund Siraf refineries

An aerial view of the offshore facilities of Iran's Assaluyeh energy zone which provide a large portion of the feed for nearby projects, including Siraf refineries.

A consortium of South Korean and Japanese companies has 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, Iran’s IRNA news agency reported.

A majority of the funding – $2 billion – would be provided by the Export-Import Bank of Korea (KEXIM) as well as the Korea Trade Insurance Corporation (K-Sure).  The remaining $1 billion would be provided by Japanese financial institutions including Nippon Export and Investment Insurance (NEXI).

The project could increase Iran’s refining capacity by 22 percent and would also increase its production of petrochemicals by 57 percent.

The period of the project would be four years and would fetch Iran $13 billion per year, IRNA added.

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 produce a daily total of (8×1,912) barrels of LPG, (8×15,071) barrels of light naphtha, (8×20,998) barrels of heavy naphtha, (8×10,236) barrels of kerosene (jet A1), and (8×10,835) barrels of gas oil with Euro-V specifications.

Earlier in June, Iran’s Petroleum Minister Bijan Zanganeh in a decree identified Siraf as a top priority of the Ministry of Petroleum that he emphasized needed to get off the ground as soon as possible. 

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