News: Essar plans $ 2 bn refinery in Iran

(PTI 08/01/2007) New Delhi - Essar Group, the multi-billion dollar steel-to-telecom conglomerate, is in talks with Iran to set up a $ 2 billion 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 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.