South Korean National Assembly Speaker Chung Sye-kyun, who is in Tehran to attend President Hassan Rouhani’s swearing-in, oversaw the signing between SKEC, Tabriz Oil Refining Company and National Iranian Oil Engineering and Construction Company (NIOEC).

“The purpose of the signing of the agreement, which is about to be signed into a contract in the near future, is to convert the furnace oil produced at the Tabriz refinery to products of higher value according to Euro 5 standard,” the report said.

Export-Import Bank of Korea will finance the project which includes upgrades to desulfurization equipment as well as gasoline, diesel and other facilities, it added.

The project will be carried out over a period of 48 months, bringing down the furnace oil capacity at the refinery to 2.0% from 20% now. Furnace oil is also known as fuel oil.

The Tabriz oil processing plant, built in 1976, is among the Iranian refineries in dire need of upgrade and modernization. In February, the country signed a $3 billion contract with China to upgrade the Abadan refinery in southwest Iran.

Tabriz operates with a capacity of 110,000 barrels per day, turning crude oil to liquefied petroleum gas (LPG), gasoline and diesel fuel.

According to Managing Director of National Iranian Oil Refining and Distribution Company Abbas Kazemi, Iran needs $14 billion of investment in total to fix and upgrade Tehran, Bandar Abbas, Isfahan, Tabriz and Abadan refineries.

Iranian refineries, he said in February, were operating at a capacity of 500,000 barrels per day, which would rise to 600,000 bpd in the current Persian year.

Iran expected to sign oil refining contracts worth $8.6 billion with a number of Japanese, Chinese and Korean companies, Kazemi said then, adding the biggest deal was reserved for Japan’s Marubeni, Chiyoda and Mitsui companies to upgrade Isfahan refinery at $3.6 billion.

A separate $2 billion contract is about to be signed with South Korea’s Daelim company to boost oil processing capacity at Isfahan refinery, said Kazemi, who is also Iran’s deputy petroleum minister.

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The state-owned PKN Orlen announced in a statement as reported by Reuters that it had bought one million barrels of Iranian Light oil. It said the cargo had been purchased from the National Iranian Oil Company (NIOC).

PKN Orlen, which mostly refines Russian oil, said that the Iranian oil would be delivered to Naftoport in Gdansk in January and then transported to PKN’s refinery in Plock.

“The processing of the feedstock most recently delivered from Iran will be a basis for further plans regarding supplies from that direction,” PKN said in its statement.

Grupa Lotos is the first Polish company to purchase oil from Iran after the removal of sanctions against the country in January.

Poland’s biggest refiner PKN Orlen announced a major purchase of crude oil from Iran thus becoming the latest company to join the already long list of European clients of Iranian oil.

In August, it announced that it had bought two million barrels of crude from Iran in a one-off purchase that had been carried out in late June.

Growing purchases of Iranian oil by Polish companies come as the country is trying to reduce its reliance on Russian oil.

To the same effect, Lotos announced in September that it was working on a long-term crude oil purchase agreement with Iran.

“After the Iranian oil is refined, we will have detailed results of the analysis, which will confirm whether we will ultimately sign a long-term agreement with Iran on oil supplies to Gdansk,” Marcin Jastrzebski, the deputy head of Lotos said.

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