Sinopec inks $6.5bn refinery deal with Iran

Chinese oil giant to build new crude refining facilities in Gulf state

(Muhannad Fala'ah/Getty Images)
(Muhannad Fala'ah/Getty Images)

Other stories: World's 10 largest oilfield technology companies | World's 10 largest petrochemicals companies | Oil industry giants: ADNOC | Oil industry giants: Saudi Aramco | Top 10 MENA Region mega projects | Top 10 billion dollar oil deals of the summer | 2009's winners and losers in the oil industry10 events in oil's history that shook the world | Top 10 Gulf mega projects | Top 10 largest publicly traded oil companiesWorld's 10 largest oilfield services companies | World's 10 largest oil and gas contractors

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. 

For all the latest refining and petrochemical news from the Middle East countries, follow us on Twitter and LinkedIn, like us on Facebook.

MOST POPULAR