China’s state-controlled Sinopec is pressing ahead with a USD 1.06bn upgrade project at Iran’s 400,000 b/d Abadan refinery, despite the imminent return of US sanctions on Iran’s energy sector.
Sinopec is contracted to build a new 210,000 b/d crude distillation unit (CDU) to replace three distillation units with a combined 250,000 b/d that were built more than 70 years ago. Its commitment will come as some relief for Tehran ahead of the 4 November re-imposition of US sanctions on its energy sector.
Companies have been rethinking plans to invest in Iran since the US withdrew from the nuclear deal and reimposed sanctions. Some contracts have been cancelled with state-owned NIOC and its subsidiaries.
Total, the most high-profile foreign company to finalize a deal with Iran following the lifting of US and EU sanctions in January 2016, has pulled out from a USD 4.88bn project to develop phase 11 of the giant offshore South Pars gas field.
South Korean construction company Daelim Industrial cancelled a USD 2.13bn contract to upgrade and expand the 375,000 b/d Isfahan refinery. South Korea’s SK Engineering and Construction has halted all work on a USD 1.88bn contract to upgrade the 110,000 b/d Tabriz refinery.
But Sinopec looks to be pressing on at Abadan.