South Korea’s SK Engineering & Construction Co. has signed a contract to launch a feasibility study for a $20 million modernization project for Iran’s Parsian Oil & Gas Development Group Co. (POGD).

Under the non-binding agreement, SK will first explore business prospects on the project of refurbishing facilities of Tabriz Oil Refining Co., an affiliate of POGD, in Tabriz, a northwestern city of Iran. The work includes upgrades to desulfurization equipment worth $20 million and other gasoline manufacturing facilities, said an official of the company. The study will take about six months. 

The company is hopeful that the renovation project could expand to work worth $200 million and $300 million in the Middle East country that has turned eager in upgrading its infrastructure following the lifting of sanctions early this year. 

The facilities of TZORC built in 1976 are in dire need of modernization. Morteza Azizi, president of POGD, came to Korea to strike the deal personally. 

The industry observers estimate expansion and renovation projects of 12 public and private oil fields in Iran value around $5 billion. The opportunities are bigger when counting in gas fields. 

Tabriz is located 700 kilometers northwest of Tehran, the capital of Iran. The 150-hectare compound refines 100,000 barrels of oil per day to produce liquefied petroleum gas (LPG), gasoline and diesel. POGD owns a 50.6 percent stake in TZORC. As the largest private energy company in Iran, POGD accounts for 10 percent market share in the Iranian oil refining market. The company has seven listed companies and eight unlisted companies.

(Source: pulsenews.co.kr)