Iran offers to set up oil refinery

Wednesday, October 03, 2007
ISLAMABAD: Minister for Petroleum and Natural Resources Amanullah Khan Jadoon and Iranian Ambassador to Pakistan Masha Allah Shakeri on Tuesday discussed the progress of Iran-Pakistan-India (IPI) gas pipeline project and supply of electricity from Iran to Pakistan.

During the meeting, they deliberated upon cooperation in coal, lead, zinc, exploration and production of iron ore and establishment of an oil refinery.

Secretary Petroleum Farrukh Qayyum, Director General Oil GA Sabri and Director General Minerals Irshad Ali Khokhar were also present.

Both sides agreed to make the most of the vast opportunities in the oil, gas and mineral sectors existing in both countries.

The Iranian ambassador informed that his country had technical expertise in mining and production of coal, lead, zinc and iron ore and that Pakistan could benefit from this. He also offered to set up an oil refinery in Pakistan and supply furnace oil.

Jadoon informed the envoy that the government was taking all possible steps to utilise deposits of coal, lead, zinc, copper and iron ore to strengthen the economy and meet energy requirements.

He said there were 175 billion tonnes of coal deposits in Sindh, adding foreign and local investors could invest in these sectors.

Jadoon said the government would welcome all Iranian cooperation in setting up a coastal refinery which could enhance development and progress in the region.


http://www.thenews.com.pk/daily_detail.asp?id=74437

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175 billion tonnes of coal, thats a lot; and that is only in Sindh (which has the majority of Pakistan's coal, but not all of it). That is a lot of coal, seeing that our consumption is only 4.6 million a year. We should increase the use of coal in electricity, and lower oil's role.

Oil refinery idea sounds great, get oil shipped in, refine it and sell it (we could do this with Iran also, since they import the majority of their refined oil).

BTW Pakistan has 184.575 billion tonnes of proven coal reserves. 184.123 billion tonnes in Sindh, .235 billion tonnes in Punjab, and .217 billion tonnes in Balochistan (NWFP doesn't have a significant amount of coal).

If Iran has the ability to refine oil, why doesn't it refine all it's own oil and sell it as a complete product as opposed to just as crude? Surely Iran can make petrol cheaper the Shell or BP can? Sell the Iranian created petrol products to nations around the world at a cheaper price then the west will sell them.

To drive cost even lower they could do all the refining in Pakistan and avoid sanctions and stuff like that too. Essentailly Iranian crude could be refined in Pakistan and then sold in Europe/America as petrol/diesel/LPG etc at cheaper prices than western compnaies could produce it, therefore under cutting them. Once you get a foothold in the market, you can start to really kill of the likes of Shell, Texaco, BP etc as they either have to make lessprofit to compete with you, or lost customers to you.

Iran isn't able to receive some equipment needed for refineries (they can not produce them indigenously and can not import due to sanctions), these sanctions don't apply to Pakistan and so they can build refineries in Pakistan (at least I think this is the reason). We need to get China involved in this also, have them help raise the daily production of Iran from 4 million barrels to 6 million barrels (amount during the Shah time). Have Iran refine 1 million barrels a day, and import 5 million barrels a day into Pakistan, refine it and sell it partly to Iran and the rest to the world (including China). If good infrastructure is made, the prices of oil (refined) will go down significantly for Iran and Pakistan, and would go down a decent amount for China. This would also help us stabilize the trade imbalance with China, and lead to further employment, revenue and investment in the country.

A very good move by Iran, which Pakistan should grab with both hands and solidify our economic ties with the country. We can certainly use these refineries in Gwadar, which would add impetus to the new port's establishment, growth and inadvertently diversify Pakistan's coastal economic strategy (Gwadar/Karachi/Ormara/Jiwani/Port-Qasim). It could also aid in our projected aim for 'North-South Corridor' to China.

I dont understand this, Iran is importer of refined oil, has petrol rationing and lacks the capability to refine oil therefore exports crude and yet is offering Pakistan refining capacity. ? What! Iran doesnt have refining capacity its lost it all during the Iran-Iraq war, during time of Shah Iran was pumping 6-8 mbpd.

This article sounds like BS.!

I answered this above. It can produce a lot of the equipment needed for refineries, but there are a few key equipment that it has to import, and due to sanctions it can not do so (and America's influence over the banning of heavy investment by corporations). But in Pakistan these equipment can be imported and the rest imported from Iran, and therefore they can help us set up refineries much cheaper then buying all the equipment from a different source. Ya Iran was pumping 6 mbpd in the Shah's time, not it is like 4 mbpd. If they raise it back to 6 mbpd (through underhand help from China, or some other means), then we can import 6 mbpd and refine it and sell it back to them and to the world, if they don't raise it, then we can import the 4 mbpd, either way it will help us and Iran. Iran will get a permanent market for its oil and it will also get refined oil much cheaper (plus more jobs and revenue created when they are able to increase production, that is if they increase production). Pakistan will get revenue, job employment, further investment, cheaper oil, more export and it will help stimulate the area which the refineries will be placed (my guess Gwadar).

Does anyone know?

Do we still get smuggled Iranian petrol in QUetts or has it stopped due to Rationing of Gasoline in Iran?

Anyone from Quetta?

How many times Iran will offer to build refinary in Pakistan? But at the end when time comes to build one they ususally back down. Last time Pakistan government had provided land and all other facilities to build a refinary by Iran at Khalifa point. But after all written deals and negotiation, they cancel the project saying it is not feasible. Now UAE is building the refinary at Khalifa point and hopefully it will complete on time.

Any project offer from Iran should taken with pinch of salt unless it is really completed and put into operation. They are normally high on talk but very low in concrete. Though I agree there is a vast scope of Pakistan-Iran economic cooperation which will be benefial to both people but due to attitude and policy of Iran governmet those have not materialize so far.

The smuggled oil is stopped, there was one station in quetta Quarry road, now its a car park and work shop