Sepahan to Upgrade Base Oil, Wax Production

Sepahan Oil Co., Irans largest base oil refiner, signed a contract with Germanys EDL Anlagenbau GmbH to upgrade base oil and wax production facilities at Sepahans Isfahan refinery.

Under the contract and accompanying license, EDL will prepare a front end engineering design for a dewaxing and deoiling unit. Leipzig-based EDL said the objective is to increase throughput of the existing dewaxing unit and improve base oil quality. A deoiling unit will also be incorporated to produce fully refined wax, and the first phase of the project is expected to be completed by mid-2019, EDL said in a press statement.

Sepahans Isfahan base oil plant, with an annual production capacity of 420,000 metric tons, accounts for about 41 percent of Irans base oil production capacity - which is all API Group I - according to LubesnGreases EMEAs 2018 Base Stock Guide.

Iranian base oil exports - of which Sepahan accounts for 70 percent - have a reputation for variable quality, so an upgrade could help address that criticism. EDLs technology should also enhance the characteristics of Sepahans base stocks. It looks like there would be less long-chain paraffins, which would lead to a lower pour point - depending on solvent, less aromatics could be present, says Stefan Mueller, associate director, research and analysis at IHS Markit.

EDLs contract with Sepahan comes as the United States prepares to reimpose sanctions on the Islamic Republics oil industry next month.

The European Union is attempting to shield European companies from the impact of U.S. sanctions and recently announced plans for a so-called Special Purpose Vehicle mechanism to maintain trading relations with Iran under the framework of the Joint Comprehensive Plan of Action.

EDLs decision to proceed with the contract that was originally signed in mid-August appears to take into account the fluid state of relations with Iran. With our technological solutions we make an important contribution to the economy and job security in Iran and contribute to stability and security in the region. And we fully act to the extent permitted by law, EDL CEO Michael Haid said in a press statement. Aside from dewaxing and deoiling technology, EDL also grants licenses for other processes to produce base oils, tender oils, waxes and other special high-quality products.

According to its website, EDL has completed 45 refinery revamps in Europe.

Sepahan did not reply to a request for a comment.