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South Korea To Improve Tabriz Oil Refinery

The agreement was signed between SK Engineering & Building (SKEC) and Oil Design and Building Firm (ODCC) in Tehran. The signing ceremony was overseen by Abbas Kazemi, CEO of National Iranian Oil Refining and Distribution Firm (NIORDC).

Gholam-Reza Baqeri Dizaj, CEO of Tabriz Oil Refining Company, says the refiner attracts overseas investors as a consequence of such advantages as ownership of a 50% stake in Tabriz Petrochemical Plant, proximity to 5 international locations and supplying merchandise of its personal brand.

In an interview with Iran Petroleum, he stated that the signature of deal with the South Korean firm would assist the corporate enter regional and international market.

The following is the full textual content of the interview he gave to Iran Petroleum:
Q: When was Tabriz oil refining company established

A: The essential design for the Tabriz oil refinery was accomplished by the American UOP company in 1974 whereas Italy’s Snamprogetti carried out the detailed design. The refinery turned operational in February 1978 with a rated refining capability of eighty,000 b/d. In 1992, the oil refining capacity of this firm rose to a hundred and ten,000 b/d. The corporate was privatized in 2010. It has at present 15 refining models to process crude oil and oil and gas energy security issues produce petroleum products, and eight utility items to support production.

Tabriz oil refining firm owns a 7% share in Iran’s refining industry. Ninety% of this company’s products are destined for gas supply and the remaining 10% are sold on inventory market to be used as feedstock in downstream industries.

Q: You lately signed a €1.6 billion deal with South Korea’s SKEC to upgrade manufacturing. In recent years, optimization initiatives together with its new gasoline production section had turn out to be operational. What was the rationale for the signature of the deal with SKEC

A: As I discussed this company was established 40 years in the past. Initially, the refinery was designed in a method to provide 30% gasoline oil which was transferred on to a thermal energy plant in Tabriz. However, with the turn of time and enchancment in conditions and emergence of environmental obligations and also in consideration of choices of NIORDC, we and different nine crude oil refining firms in Iran were obligated to cut back our fuel oil manufacturing stage to beneath 10%, whereas at the same time enhancing the quality of different products to the Euro-5 grade, and lowering sulfur content material to beneath 0.5% weight. Due to this fact, refinery development tasks started in 2007 and the first step was to determine a new gasoline manufacturing unit. This unit became operational in 2013 with an investment of €265 million. At the moment, 35% of the refinery’s gasoline manufacturing complies with the Euro-4 requirements. So as to deliver the grade of remaining manufacturing to the Euro-4 customary, the isomerization unit will come online and by the end of the current [calendar] 12 months or at the latest in the first half of the subsequent [calendar] year, quality of the gasoline produced in the Tabriz oil refining company shall be in full compliance with the Euro-4 and Euro-5 standards. Furthermore, gasoline refining project or gasoil output quality improvement is about to turn out to be operational next February with an funding of €100 million (€70 million for the principle project and €30 million for utilities). That will elevate the standard of this product to Euro-four grade.

But enhancing the quality of gas oil and converting it to lighter products would need vital investment. It was inconceivable for us to merely make investments on this mission; subsequently, we sought credit score line with a decrease borrowing price. After the implementation of the JCPOA (Iran’s nuclear deal with six world powers) by the 11th administration, we embarked on negotiations with several companies, together with South Korea’s SKEC, which has technology to improve gasoline oil manufacturing and finance the mission. One yr ago, feasibility studies for the development of fuel oil quality started. Over this time period, 37 models had been introduced for the refinery and probably the most engaging one was chosen.

Q: What was the benefit of the SKEC mannequin compared with others
A: Along with the model, the finance of venture was of high importance to us. One motive for choosing the company was its specific financing assets. After the JCPOA implementation, we had held talks with companies that would obtain credit line. In the end, South Korea managed to provide the credit score line via Export- Import Financial institution (EXIM Financial institution). Afterwards, a €1.6 billion settlement was signed between Iran and South Korea for optimizing the output of Tabriz oil refining company. The settlement shall be in impact for 48 months.

Q: What’s the share of South Korea in this finance
A: At the very least 75% of financial resources for implementing this project shall be offered by South Korea’s EXIM Bank. Nevertheless, we noted in the contract that a minimum of fifty one% of tools and technical assistance should be supplied by Iran and that equipment which would be manufactured domestically shouldn’t be imported. As an illustration, within the gasoline production unit of the refinery, which came on-stream in 2007, we needed to import machinery and reactors. But now all thermal transducers and reactors wanted for our tasks are made in Iran. Most pumps are provided by Iranian corporations and we now have solely to import tools and machinery whose manufacturing will not be possible in Iran.

Q: Given the signature of this deal, will we witness more agreements oil and gas energy security issues with overseas companies sooner or later

A: No, we are going to not signal any agreement with overseas companies for optimizing merchandise supplied by the Tabriz refinery because this part is the final optimization challenge right here; nevertheless, I believe that we are going to need to attract foreign funding into petrochemical units over coming 5 years. Of course, SK has embarked on feasibility research in this regard, but it doesn’t mean that we are going to award the mission to the Koreans. We intend to have cooperation with different companies, too.

Q: You had earlier mentioned that the Tabriz oil refinery would appeal to international funding. Would you please explain additional

A: The primary purpose is that we neighbor Azerbaijan, Turkey, Iraq, Armenia and the autonomous Republic of Nakhichevan. In case our need for some products falls sooner or later, we can have the possibility to be current in international markets. Moreover, after the implementation of this settlement [with SKEC] we are going to step into regional and global markets for promoting our products.

Second, we’re the one crude oil refiner with 50% petrochemical share (Tabriz Petchem Plant). We’re in actual fact a petrorefinery and we will convert any surplus products to petrochemicals to be equipped on European markets. In actual fact, we are able to develop downstream units and traders may simply be engaged.

Third, we are among the primary refining companies in Iran to have obtained model permit from NIORDC within the gasoline and gasoil sectors. Multinational firms can produce our high-high quality products below our own model and sell to venues located near the Tabriz oil refining firm.

Q: How do you guarantee the gross sales of your products
A: Our products take pleasure in sturdy technical help. We are the technical base of northwest Iran and now we have boosted our expertise and technical knowhow lately. We personal essentially the most hardware-superior refineries in the refining and oil production phase. It is exclusive in Iran. We aren’t frightened at all in regards to the market as a result of multinational firms are keen to produce engine oil and gasoline to spots near border via our company. With the signature of this agreement, I think that we will become more energetic within the regional market sooner or later and we are able to export our products to global markets under our personal model.

Q: How many varieties of merchandise are currently produced at Tabriz oil refinery
30,000 cubic cansA: This firm was producing eight oil merchandise up to 2013; nonetheless, we’ve reached thirteen over these four years. We plan to add seven more products to our basket to carry the variety of our merchandise to 20 by the tip of the [present calendar] 12 months. That will boost our competitive benefit. We are legally sure to provide our merchandise on home markets first. Then our merchandise shall be provided to places that are below our direct supervision. In the ultimate phase we’ll export surplus merchandise.

Tabriz oil refining firm is the one refinery that may produce its own base oil as much as the top of the 12 months after which we’ll attempt to diversify our base oil manufacturing.

Q: How much is the present fee of gasoline and gasoil production at the refinery
A: We had been producing 2.9 mb/d of gasoline by 2013, which has now reached 3.8 mb/d. We are also producing 6 mb/d of gasoil.

Q: What measures have you taken with regard to lowering sulfur manufacturing
A: Establishment of a brand new gasoil refining unit to reduce the sulfur content material of gasoil (from the present 7,000 ppm to under 50 ppm) and increasing the capacity of sulfur manufacturing from 60 tonnes a day to 104 tonnes a day are underneath approach. They’ll develop into operational this 12 months.

Q: You were not too long ago awarded silver medal for management initiatives. Would you please inform us about that

A: Tabriz Oil Refining Company was ranked the second among firms from fifty four nations by the Worldwide Council of Management Consulting Institutes (ICMCI) and gained the 2017 Constantinus International Award. This award goes annually to companies and administration consultants which handle to result in main changes in management, IT and ICT.