Fouman Chimie and Sepahan Oil are moving forward with plans to build an API Group II base oil plant in Bandar Abbas, Iran. The project had been stalled by economic sanctions that prevented acquisition of refining technologies, but the joint venture has skirted that problem by contracting with French technology provider Axens.
The plant will have capacity to produce 270,000 metric tons of base oil per year and is scheduled to open in the fourth quarter of 2011, according to an announcement distributed yesterday by Fouman Chimie.
Fouman Chimie and Sepahan have been exploring the project at least since early 2007, but had been unable to obtain catalytic technology used to produce highly refined Group II and III base stocks. Chevron and ExxonMobil supply the globes most popular technologies, but both companies are based in the United States. As part of its effort to halt Irans nuclear program, the U.S. government has imposed sanctions prohibiting American companies from conducting business with Iranian counterparts.
The joint venture is operating as Caspian Oil, a former Fouman Chimie subsidiary in which Sepahan bought a 40 percent stake in March. According to yesterdays announcement, the plant will use Axens hydrorefining technology, a catalytic process that occurs after vacuum distillation and before solvent dewaxing.
Fouman Chimie said the project has received final investment approval and that an engineering, procurement and construction contract has already been awarded. The plant will be built adjacent to a refinery operated by National Iranian Oil Co.
Fouman Chimie said the joint venture is building a Group II plant because base oils from existing Iranian plants do not meet the quality requirements of the automotive engine oil market. Iran has four base oil plants, all predominantly Group I, although Iran Oil, which operates plants in Tehran and Abadan, claims capability to produce a small amount of Group II.
In fact, all base oil plants in the Middle East are Group I. Several projects are now underway, however, that would bring Group III capacity on around the same schedule as the Caspian Oil plant. A joint venture between Shell and Qatar Petroleum is building a 1.5 million t/y plant at Ras Laffan, Qatar, that is scheduled to open in 2011. A joint venture between Neste Oil and Bapco plans to open a 400,000 t/y plant in Bahrain the same year. Another alliance, between Takreer, Neste and OMV has agreed to build a 500,000-t/y plant in Ruwais, Abu Dhabi, United Arab Emirates, by 2013.
Irans Behran Oil has outlined plans to build a 400,000 Group II plant in Tabriz, Iran, but has also been stymied by the U.S. economic sanctions.
Fouman is a privately owned manufacturing, marketing and sales and distribution business headquartered in Tehran. Its core activities are in the automotive, household, personal care, adhesive and packaging industries. Sepahan is located in Esfahan, Iran, where it operates a 400,000-t/y Group I plant.