Iranian firm wins Tehran refinery upgrade project

Iranian contracting company Chagalesh Consulting Engineers has been awarded a €200mn engineering, procurement and construction (EPC) contract to upgrade a number of gasoline producing units at the 220,000 b/d Tehran refinery.

The project for Tehran Oil Refining (TORC), a private-sector refiner that is supervised by state refiner NIORDC, will involve both raising gasoline production capacity at the refinery by 12pc — from 6.6mn l/d (41,510 b/d) to 7.5mn l/d (47,170 b/d) — and upgrading the quality of the produced gasoline to Euro-5 standard. According to TORC, the project will be complete by June 2024, and boost refining margins by $1/bl.

The project scope will include the construction of a 16,000 b/d naphtha hydrodesulfurization unit; a 14,000 b/d continuous catalytic reforming (CCR) unit, which will boost the produced gasoline's octane number from 87Ron to 91Ron; a de-ethanizer tower and a number of other ancillary units.

The Tehran refinery is one of several that Iran has been seeking to upgrade since US and EU sanctions were lifted in 2016 following the signing of the Iran nuclear deal in 2015, to both reduce fuel oil output and produce cleaner, higher-value products.

In line with this, Iran in 2016 announced a $34bn refining capacity expansion programme covering construction of two new plants — the 300,000 b/d Bahman Geno and 150,000 b/d Anahita refineries — and upgrades at five of Iran's six largest refineries.

Apart from Tehran refinery, Iran was also looking to upgrade 400,000 b/d Abadan, the 375,000 b/d Isfahan, the 335,000 b/d Bandar Abbas and the 110,000 b/d Tabriz refineries. The country went on to award a number of contracts to east Asian companies, but the return of US sanctions on Iran in 2018 following Washington's exit from the nuclear deal saw the foreign firms pull out of the agreements for fear of being targeted by the sanctions.

By Ieva Paldaviciute