Gwadar: Iran to build oil refinery

[Xracer]

Excellent news !

ooooooohhh man i smell Something Burning do you smell tooo aahhhh someone call Rescue 1122 Our eastern neighbours are on Fireeeeeeeeeeeeeeeeeeeeeeeeeeeeeee

Bye way really Awesome News its my dream to see 4 lane Karakorum highway all way from Gwadar to China and also China-Pakistan-Iran rail link

 

[niaz]

For those who doubt Iran can build this refinery.It's now 10 years that no country in the world can invest in Iran's petroleum industry,which means we have to do everything by our own. Iran is raising some of best petroleum experts in its universities and some really huge projects are going on in the country with totally domestic capabilities.It was only 3 weeks ago that Iran opened one of the largest gasoline production units in ME, in Arak which was done under an extensive development program of the refinery.

Here are some refineries in Iran, all of them built and developed by Iranian experts.
Siri LNG unit:

Petrochemical complex of Bandar Emam:

Shazand oil refinery.It's expansion was completed 3 weeks ago and now is Iran's largest gasoline production unit and one of the largest in ME.

My countrymen are so easily beguiled by rhetoric and pleasant words. The facts however speak differently.

Firstly about refinery construction from grass roots.

Storage & reactor vessels visible from outside are only shells. One should not think that a refinery and petrochemical complex is nothing but welding together a lot of steel plates. There is large number of pumps and compressors which involve specialized metallurgy. Then there are huge furnaces, again no easy task to build.

Heart of the refinery is hidden from the view and it is in the process which requires highly specialized & sometimes tri-metallic catalysts. Most of these are covered under international patents and it is illegal to copy the same. Industrial espionage is a huge game in itself.

Having spent all my working life in the oil industry, I know a little about it. For the benefit of the honourable members, I give top names in the refinery & petrochemical construction companies.

Foremost international Oil & Gas Design & Construction companies are Bechtel (USA),Technip (France), Aker Solutions (Norway), Chiyoda Corporation (Japan), SNC-Lavalin Group (Canada), J. Ray McDermott (USA), JGC Corporation (Japan),Hyundai Heavy Industries (South Korea),Foster Wheeler (USA), Daelim Industrial Company (South Korea).

In addition to the above one needs catalysts to run a refinery/ petrochemical complex. . World’s top catalyst manufacturers being Haldor Topsoe: Denmark, UOP : USA, Axens: France, Johnson Matthey: UK, Criterion: USA, Süd-Chemie: Germany, Albemarle: USA, Grace Davison: UK, BASF: Germany,ExxonMobil Chemical; USA

Chinese companies are still in embryonic stage but coming up fast. You will find that either one of the more the above would be involved directly or thru their subsidiaries in every large oil project one way or another.

Oil refinery is a very dangerous place and there is always a risk of fire/explosion under the best of circumstance therefore the highly skilled workers are required else $5-billion investment goes up in flames along with about 200 lives.Thus no fake degrees or madrasah graduates here.

Claims of construction an oil refinery or a petrochemical complex ab initio by any less developed country including India/ Brazil etc. without outside help is idle boast to say the least.

Iran Gov’t has literally spent hundreds of billions in the import of gasoline and gas oil during last 10 years but has not been able to completely refurbish Abadan refinery.

Abadan refinery at 630,000 bbl. per day was the largest in the world until 1980 when it was bombed by the Iraqis. It has since been running at about 430,000 bbl. without cracking facility which was one the main reasons of gasoline imports by Iran. Understand Sinopec is now modernizing it under a $6.5- billion agreement signed in 2009.

I am sorry to contradict Honourable Era_923 but the statement regarding Arak refinery is misleading. Iran doesn’t have the capacity to build refineries. Arak Shazand refinery was originally 170,000 bbl. per day capacity which has been boosted to 250,000 bbl. per day. The bid was won by Sinopec Tenth Construction Company in September 2009 worth 2.7-bilion Euros.

Design consultants were JGC from Japan. Iranian firms Sazeh & ODCC were part of the consortium along with SEI – China who were contract managers. Units were built under licence from KTI Italy (a subsidiary of Kaltetechnik, GmbH Germany), Technip Italy, UOP (UK) & Axen (France). Project managers were MAPSA & Enerchimi, both Iranian.

You can see that JGC, Technip & Axen from the company list above were involved. So much for the 100% Iranian construction claim.

Finally, Iranian port Chah Bahar is barely 110 miles from Gwadar as the crow flies. India & Iran have been trying to get the Central Asian route through Chah Bahar for a long time and there is rail connection from Sarkhs in the north of Iran. Rhetoric aside, do you really think that Iran is going to shoot herself in the foot by promoting Gwadar?

 

[Abii]

@ niaz

Before the recent set of sanctions in the past few years Iran was getting some refined oil from countries like Singapore for a reason. If I'm not wrong, 3/4 of the price of the refined product (say petrol) is the oil itself. Out of the remaining 1/4 a good chunk of it is transportation. Now the oil is free for Iran b/c we're the ones producing it and this oil was getting shipped to Singapore and brought back as refined product with Iranian tankers. That means Iran was paying a very small sum of money to get the oil refined.

Transportation was "free" and the oil was also "free," hence, the final cost would be very low.

The alternative was to build new refineries at the cost of tens of billions of dollars!!! With that money Iran was able to get that oil to a third party, refine it and bring it back for more than 2 decades and still save cash. With the sanctions though building new refineries finally became an option.

 

[Argus Panoptes]

................

I am sorry to contradict Honourable Era_923 but the statement regarding Arak refinery is misleading. Iran doesn’t have the capacity to build refineries. Arak Shazand refinery was originally 170,000 bbl. per day capacity which has been boosted to 250,000 bbl. per day. The bid was won by Sinopec Tenth Construction Company in September 2009 worth 2.7-bilion Euros..................

Summary: Iran doesn’t have the capacity to build refineries.

So the present thread will likely go the way of the "tallest building in Karachi" and "$45 billion investment"?

Why do we keep running after mirages in the desert (or is it green gardens)?

 

[Serpentine]

My countrymen are so easily beguiled by rhetoric and pleasant words. The facts however speak differently.

Firstly about refinery construction from grass roots.

Storage & reactor vessels visible from outside are only shells. One should not think that a refinery and petrochemical complex is nothing but welding together a lot of steel plates. There is large number of pumps and compressors which involve specialized metallurgy. Then there are huge furnaces, again no easy task to build.

Heart of the refinery is hidden from the view and it is in the process which requires highly specialized & sometimes tri-metallic catalysts. Most of these are covered under international patents and it is illegal to copy the same. Industrial espionage is a huge game in itself.

Having spent all my working life in the oil industry, I know a little about it. For the benefit of the honourable members, I give top names in the refinery & petrochemical construction companies.

Foremost international Oil & Gas Design & Construction companies are Bechtel (USA),Technip (France), Aker Solutions (Norway), Chiyoda Corporation (Japan), SNC-Lavalin Group (Canada), J. Ray McDermott (USA), JGC Corporation (Japan),Hyundai Heavy Industries (South Korea),Foster Wheeler (USA), Daelim Industrial Company (South Korea).

In addition to the above one needs catalysts to run a refinery/ petrochemical complex. . World’s top catalyst manufacturers being Haldor Topsoe: Denmark, UOP : USA, Axens: France, Johnson Matthey: UK, Criterion: USA, Süd-Chemie: Germany, Albemarle: USA, Grace Davison: UK, BASF: Germany,ExxonMobil Chemical; USA

Chinese companies are still in embryonic stage but coming up fast. You will find that either one of the more the above would be involved directly or thru their subsidiaries in every large oil project one way or another.

Oil refinery is a very dangerous place and there is always a risk of fire/explosion under the best of circumstance therefore the highly skilled workers are required else $5-billion investment goes up in flames along with about 200 lives.Thus no fake degrees or madrasah graduates here.

Claims of construction an oil refinery or a petrochemical complex ab initio by any less developed country including India/ Brazil etc. without outside help is idle boast to say the least.

Iran Gov’t has literally spent hundreds of billions in the import of gasoline and gas oil during last 10 years but has not been able to completely refurbish Abadan refinery.

Abadan refinery at 630,000 bbl. per day was the largest in the world until 1980 when it was bombed by the Iraqis. It has since been running at about 430,000 bbl. without cracking facility which was one the main reasons of gasoline imports by Iran. Understand Sinopec is now modernizing it under a $6.5- billion agreement signed in 2009.

I am sorry to contradict Honourable Era_923 but the statement regarding Arak refinery is misleading. Iran doesn’t have the capacity to build refineries. Arak Shazand refinery was originally 170,000 bbl. per day capacity which has been boosted to 250,000 bbl. per day. The bid was won by Sinopec Tenth Construction Company in September 2009 worth 2.7-bilion Euros.
Design consultants were JGC from Japan. Iranian firms Sazeh & ODCC were part of the main contractors along with SEI – China were contract managers. Units under licence from KTI Italy (a subsidiary of Kaltetechnik, GmbH Germany), Technip Italy, UOP (UK) & Axen (France). Project managers were MAPSA & Enerchimi, both Iranian.

You can see that JDC, Technip & Axen from the company listed above are involved. So much for the 100% Iranian construction claim.

Finally, Iranian port Chah Bahar is barely 110 miles from Gwadar as the crow flies. India & Iran have been trying to get the Central Asian route through Chah Bahar for a long time and there is rail connection from Sarkhs in the north of Iran. Rhetoric aside, do you really think that Iran is going to shoot herself in the foot by promoting Gwadar?

I did not compare Iran's oil industry with giants like U.S, South Korea, Japan or Russia.Indeed they are better than us.
About the Shazand refinery, can you kindly provide your proofs that all those companies from Italy,Japan and France have participated in Shazand development program? It seems you are unaware my friend that no foreign country, including China, can not invest more than $20 millions in Iran's oil and gas industry according to U.S sanctions passed by congress.

In 1996, the United States Congress passed the Iran–Libya Sanctions Act (ILSA). Under ILSA, all foreign companies that provide investments over $20 million for the development of petroleum resources in Iran will have imposed against them two out of seven possible penalties by the U.S.

denial of Export-Import Bank assistance;
denial of export licenses for exports to the violating company;
prohibition on loans or credits from U.S. financial institutions of over $10 million in any 12-month period;
prohibition on designation as a primary dealer for U.S. government debt instruments;
prohibition on serving as an agent of the United States or as a repository for U.S. government funds;
denial of U.S. government procurement opportunities (consistent with WTO obligations); and
a ban on all or some imports of the violating company.

Japan did sign a contract for development of some refineries in Iran, but it pulled out due to U.S pressure in 2010.The same happened for Chinese, with the difference that Iran kicked them out for delaying to start the project over and over and instead Khatam-al Anbya and NIOC took the project.Iran now produces 80% of equipment required in oil industry according to oil minister and those who are imported, are being implemented by domestic experts.We still have some distance ahead of us,I agree, but in 10 years, we will match giants like Russia and India with fully domestic capabilities.

Right now, there is a project called 'Persian Gulf star' near Bandar Abbas with maximum capacity of 360,000 barrels per day and will produce 35 millions liters of gasoline a day, which mean 60% of Iran's domestic consumption alone.It's 85% owned by domestic contractors and will be completed 1 year from now.
Now would you mind explaining to me, with that $20 millions dollars limitation on investing in Iran's oil and gas industry, how are those foreign companies supposed to build 'most' of Iran's refineries?

Persian Gulf star location

About the Gwadar, it's irrelevant to Chabahar. We will transfer South Asian goods from Chahbahar to Central Asia and Afghanistan. Gwadar on the other hand is China's center of interest which will be a hub for Chinese mostly.Besides, both Gwadar and Chabahar have such capability for development that even both of them won't be enough to fulfill demands in South Asia.So there is no problem with them living together.Also,not to forget,Iran has a better railway system than Pakistan right now and it's being developed even further with good speed.Not to forget stability.

 

[cloud_9]

@ niaz

Before the recent set of sanctions in the past few years Iran was getting some refined oil from countries like Singapore for a reason. If I'm not wrong, 3/4 of the price of the refined product (say petrol) is the oil itself. Out of the remaining 1/4 a good chunk of it is transportation. Now the oil is free for Iran b/c we're the ones producing it and this oil was getting shipped to Singapore and brought back as refined product with Iranian tankers. That means Iran was paying a very small sum of money to get the oil refined.

Transportation was "free" and the oil was also "free," hence, the final cost would be very low.

The alternative was to build new refineries at the cost of tens of billions of dollars!!! With that money Iran was able to get that oil to a third party, refine it and bring it back for more than 2 decades and still save cash. With the sanctions though building new refineries finally became an option.

I think what he's trying to say is that the core components of the refinery are patented by European or American companies.So due to sanctions the chances of Iran getting those component from licensed manufacturers are slim.

 

[RazorMC]

I also doubt Iran's capabilities in constructing oil refineries.

If our funds allow, we should build a refinery through capable parties and import crude from Iran.

 

[my2cents]

Lack of refining capacity have more to do with business relations and creating dependency between customer & buyer than Iran's capacity to build refineries. You know if Iran start refining all required oil by herself than countries who will be effected will be her customers. For example major chunk of refined oil is imported from China+India and both are major customer as well. Same is the logic behind this refinery.

excellent point LoveIcon, I always wondered why they don't build their own refineries. Interdependence creates good and positive trade relations.

In the same vein you guys should build the refinery yourself using Iranian oil. If Iran builds most of the pipeline, supply the oil/gas and also builds the refinery then you guys are putting all the eggs in one basket. Just a word of caution!!

 

[Sugarcane]

excellent point LoveIcon, I always wondered why they don't build their own refineries. Interdependence creates good and positive trade relations.

In the same vein you guys should build the refinery yourself using Iranian oil. If Iran builds most of the pipeline, supply the oil/gas and also builds the refinery then you guys are putting all the eggs in one basket. Just a word of caution!!

IF the refinery is built than it will be surely a Public Limited company as per Pakistan's law

 

[Umair Nawaz]

Now what we, need to do is to build a high out put steel mill in Gwadar, import iron ore from Australia, build steel and sell it to China, Iran, Middle east and C.Asia. We have a historic opportunity to compete India in the steel market, they cannot easily reach and sell to C.Asia, China,Russia and Turkey, we can!

Good suggestion

point to be noted!!!

 

[Umair Nawaz]

I did not compare Iran's oil industry with giants like U.S, South Korea, Japan or Russia.Indeed they are better than us.
About the Shazand refinery, can you kindly provide your proofs that all those companies from Italy,Japan and France have participated in Shazand development program? It seems you are unaware my friend that no foreign country, including China, can not invest more than $20 millions in Iran's oil and gas industry according to U.S sanctions passed by congress.



Japan did sign a contract for development of some refineries in Iran, but it pulled out due to U.S pressure in 2010.The same happened for Chinese, with the difference that Iran kicked them out for delaying to start the project over and over and instead Khatam-al Anbya and NIOC took the project.Iran now produces 80% of equipment required in oil industry according to oil minister and those who are imported, are being implemented by domestic experts.We still have some distance ahead of us,I agree, but in 10 years, we will match giants like Russia and India with fully domestic capabilities.

Right now, there is a project called 'Persian Gulf star' near Bandar Abbas with maximum capacity of 360,000 barrels per day and will produce 35 millions liters of gasoline a day, which mean 60% of Iran's domestic consumption alone.It's 85% owned by domestic contractors and will be completed 1 year from now.
Now would you mind explaining to me, with that $20 millions dollars limitation on investing in Iran's oil and gas industry, how are those foreign companies supposed to build 'most' of Iran's refineries?

Persian Gulf star location

About the Gwadar, it's irrelevant to Chabahar. We will transfer South Asian goods from Chahbahar to Central Asia and Afghanistan. Gwadar on the other hand is China's center of interest which will be a hub for Chinese mostly.Besides, both Gwadar and Chabahar have such capability for development that even both of them won't be enough to fulfill demands in South Asia.So there is no problem with them living together.Also,not to forget,Iran has a better railway system than Pakistan right now and it's being developed even further with good speed.Not to forget stability.

u mean indian goods!

irani railways vs pak's n stability factors r temporary problems....they will not remain forever but these ports n there works will remain forever!!!

 

[Serpentine]

u mean indian goods!

irani railways vs pak's n stability factors r temporary problems....they will not remain forever but these ports n there works will remain forever!!!

Yes, mainly India.But Bangladesh, Thailand,Malaysia and other countries also can use it for good.

I know instability in Pakistan is temporary,and I hope it ends soon.It can also help our side of border to grow much faster.

 

[my2cents]

So much so for the much hyped and old conspiracy theories about how Iran's Cha Bahar port (with Indian help) is going to counter Pakistan's Gwadar port. That was just non-sense.
Business is business. Both countries are going to benefit from this refinery. Sure, Cha Bahar and Gwadar (along with other Gulf port) are going to be in competition but the pie is really large and there is enough out there to sustain yet another port around the Gulf, especially with China (and eventually India's) participation.

PS. Recently Zardari talked about paying Iran through some barter system (wheat etc). Is that even feasible on such a large project?

Point to be noted is that Iran will accept barter system now because of sanctions.... but in future you guys have to shell out hard foreign currency. Actually I am happy things are moving in right direction for Pakistan. You guys should give credit to Zardary and his team.

 

[Umair Nawaz]

Yes, mainly India.But Bangladesh, Thailand,Malaysia and other countries also can use it for good.

I know instability in Pakistan is temporary,and I hope it ends soon.It can also help our side of border to grow much faster.

Then why will Bangladesh thailand malaysia will go far ahead to chabahar when gawader lies in arabian sea wilth already infrastructure in place?
Now the china is building railways not pak from gawadar to Kashgar n not long ago they were studying the terrain for bullet trains in this route too!

Moreover the wordclass road KKH is already there who is going upgrade as we speak upto China and from there they can easily go into CA, bypassing Afghanistan who will still remain problematic country as America leaves, it is leaving Kargai type puppets there. Who n his successors will work as Raza Shah Pehlvi used to work for america in this region and Pak's former Govs used to do.

So bottom line is...i still think Chabahar will not be a very successful project as compared to Gawadar who is also third deepest port too!!!

 

[explorer9]

Point to be noted is that Iran will accept barter system now because of sanctions.... but in future you guys have to shell out hard foreign currency. Actually I am happy things are moving in right direction for Pakistan. You guys should give credit to Zardary and his team.

Credit for what, This fellow will always get his 10% for the commencement of the project