Sinopec to upgrade Iran’s Abadan refinery

SINOPEC ENGINEERING has won an engineering, procurement and construction (EPC) contract to upgrade Iran’s ageing Abadan refinery.

The Abadan refinery is Iran’s oldest, originally built in 1912, and partially rebuilt from the 1980s onward following extensive damage in the Iraq-Iran war. It currently has a capacity of around 400,000 bbl/d. The National Iranian Oil Engineering and Construction Company, which owns the refinery, wants to upgrade the refinery, which operates at low efficiencies, and produces large amounts of mazut, a low-grade fuel oil.

The new contract is for Phase II of the upgrade project, and Sinopec says the contract value is CNY6.858bn (US$1.06bn). Sinopec also carried out Phase I of the upgrade.

Iran is keen to expand and improve its oil production and refining capacity since international sanctions were lifted in 2016. A number of contracts have been announced for exploration, field development and refinery building and upgrades, including with Total, CNPC, Shell and Daewoo. Most recently, South Korea's Daelim Industrial Company signed a US$1.9bn contract to expand the Isfahan refinery.

Managing director of National Iranian Oil Refining and Distribution Company Abbas Kazem recently told reporters that upgrading the Tehran, Bandar Abbas, Isfahan, Tabriz and Abadan refineries would require around US$14bn of investment.