In a bid to develop Iran’s oldest crude processing facility in the oil-rich province of Khuzestan, China’s Sinopec Engineering Company, has reportedly signed a deal worth USD 1 billion. According to reports, Sinopec Engineering has won an EPC (Engineering, Procurement, and Construction) contract to develop the second phase of the Abadan refinery.
For the record, Iran’s Abadan refinery, once the largest oil refinery in the global oil & gas industry, was originally built in 1912 and partially rebuilt in the 1980s as it was heavily damaged during the Iraq-Iran war. The refinery currently has a capacity of processing around 400,000 barrels/day. The National Iranian Oil Engineering and Construction Company, which reportedly owns the Abadan refinery, is expecting the development venture to be completed in the timespan of the coming four years and is further planning to reduce the mazut output to less than 20% from the current 40%.
Sources reveal that the Sinopec engineering group will invest around CNY 6.86 billion (currently the overall contract value) and the China Export and Credit Insurance Corporation will also be financially supporting the venture. According to the Iranian officials, the funding worth USD 3 billion provided by China Export and Credit Insurance Corporation is a part of the deal to refurbish and expand the facility.
Reportedly, Iran’s refineries produce extensive amount of diesel, mazut, and other fuels that are bound to accelerate the climate change conditions. The key purpose of this deal will be to increase the output of high quality gasoline and deem the refinery self-sufficient with regards to the production of automobile fuel.
According to experts, Iran is taking consistent efforts in expand the growth prospects of its energy, mining, and oil & gas industry to extort higher proceeds from its abundant hydrocarbons sources, while fulfilling its commitment towards reducing the impact of climate changes.