The Tehran Oil Refinery (National Iranian Oil Company/Public Domain) Iran is planning to tender two refinery construction contracts worth $18bn to domestic consortiums as it seeks to increase its crude oil refining capacity by 600,000 barrels per day by 2027, PressTV news agency reports, quoting the official IRNA news agency.

The projects are intended to halt an 11% decline in national refining capacity over the past nine years. The county’s existing refineries can process 2.1 million barrels per day (bpd) of crude, which, after satisfying domestic demand, leaves only 250,000 barrels of petrol available for export. The new refineries will increase capacity by almost 29%.

Memorandums of understanding were signed on Monday by Oil Ministry officials and executives from the projects’ backers in the presence of Iranian president and petroleum minister Javad Owji.

A consortium comprising three energy companies, five banks and the Oil Ministry’s fuel department will provide $11bn in investment for construction of the Shahid Soleimani Petrochemical Refinery on the Persian Gulf coast, which will process heavy crude.

The companies involved are, on the finance side, Melli, Refah Kargaran, Mellat and Tejarat banks and the Ahdaf Investment Company. The energy companies are Tadbir Energy Group, Persian Gulf Petrochemical Industries Company and the National Iranian Oil Refining and Distribution Company of Iran.

The refinery is expected to come online by 2027 in the southern port city of Bandar Abbas with a capacity of processing 300,000 bpd. Some 65% of the output will be fuels and 35% petrochemicals.

The second contract was awarded to a consortium of three banks and a financial conglomerate. This group will fund the Morvarid Makran Refinery in the port of Jask, located to the east of Bandar Abbas, with an investment of a little less than $7bn.

The companies concerned are Mofid Economic Group, and the Mellat, Tejarat and Parsian banks.

Iran has built major crude oil delivery terminals in Jask, at the mouth of the Strait of Hormuz, where oil produced in southwest Iran is pumped through a 1,100km pipeline to export facilities and storage houses in the area.

This refinery will process 300,000 bpd of crude oil and will produce various fuels, according to IRNA.

The Tehran Times notes that the projects will advance a number of government goals, including creating added value, avoiding the need to import petrol, creating jobs, supporting domestic companies and guiding liquidity towards productive investment, as well as increasing the country’s refining capacity.