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The Chinese oil giant Sinopec has signed a memorandum of understanding (MoU) with the state-owned National Iranian Oil Refining and Distribution Company (NIORDC) that will see the company invest US$6.5 billion in the construction of oil refineries in the Gulf state.
The Mehr news agency reported that the deal between the two companies should be agreed within the next two months and that technical experts from both sides were looking at ways to best implement the MoU.
Mehr also said that feasibility studies regarding profitability and land acquisition had already been carried out and tenders regarding the engineering, procurement and construction (EPC) of the refineries would be issued in the near future.
Iran plans to build seven new refineries to process its crude oil in a bid to boost its domestic refining capabilities. The new refineries, which would have a total capacity of 1.56 million barrels per day (bpd), would increase Iran’s refining output by almost 50% to 3.2 million bpd.
The total cost for the new facilities is estimated to be around US$23 billion.
China is one of Iran’s remaining allies and is currently the second-largest buyer of Iranian crude oil.