China opens first LC for Iran in post-sanctions era
Baku, Azerbaijan, Jan. 10
By Fatih Karimov – Trend:
China has opened the first letter of credit (LC) for Iran’s refinery projects following the removal of international sanctions against Tehran last year, Abbas Kazemi, Iran’s deputy oil minister, said.
The first LC worth $1.3 billion was opened by China Export & Credit Insurance Corporation (Sinosure) to finance the Abadan refinery renovation and development project, Kazemi said, Mehr news agency reported Jan. 10.
The project is aimed at decreasing the fuel oil output of Abadan refinery and increasing the output of more valuable products, including gasoline and diesel, Kazemi, who heads the National Iranian Oil Refining and Distribution Company (NIORDC), said.
The Chinese side owns an 85-percent share of the project, while the Iranian side will supply 15 percent of the financial resources.
Last January Kazemi warned against postponing the process of signing the contract for development of the refinery by the Chinese side.
He said that the NIORDC has been discussing the issue of financing the project with a Chinese financier over the past several years.
The capacity of the aged Abadan Refinery is 400,000 barrels per day with three crude oil distillation units processing 250,000 barrels of crude per day. The distillation units suffer from low productivity due to their time-worn technology and equipment which were installed over 70 years ago.