Essar plans 2 bn dlr refinery in Iran

NEW DELHI: Essar Group, the multi-billion dollar steel-to-telecom conglomerate, is in talks with Iran to set up a two billion dollar refinery in the oil-rich country's southern region.

"Essar is in talks with state-run National Iranian Oil Refining and Distribution Company (NIORDC) to set up a 300,000 barrels per day refinery at Bandar Abbas," an industry source said.

Iran has embarked upon an 18-billion dollar expansion of its oil refining capacity to meet its rapidly growing domestic fuel requirements.

Essar, which is already in talks with Iran for setting up a steel plant, plans to process Iran's heavy crude at the proposed refinery.

"The company wants a minimum 51 per cent stake in the project and discussions currently are focused on the shareholding," the source said.

When contacted an Essar Group spokesperson said: "We keep exploring growth opportunities globally but we do not want to comment on any specific project."

Essar had some months ago begun negotiations with Iran for a foothold in the oil and gas rich OPEC nation. Among the proposals being pursued by Essar include setting up a steel plant, building an oil refinery, importing liquefied natural gas and projects for oil and gas exploration and production.

The industry source said Essar was keen on taking a stake in a gas field to not only feed its proposed steel plant but also to ship LNG to India.

Essar plans to set up three steel plants in the Middle East, including a joint venture to build a 1.5 million tons a year steel plant in Iran.