A $5.5 billion investment by the Indian Oil Corporation (IOC) will raise the capacity of the firm's smallest refinery co-owned by Iran to 300,000 barrels per day, according to IOC chairman B. Ashok.
The project - set to renovate IOC subsidiary Chennai Petroleum Corp.'s Nagapattinam refinery - will allow Iran to meet demand for refined products in southern India, according to Reuters.
As the Asian giant develops, its appetite for energy is slated to increase exponentially in accordance with the economic inclusion of hundreds of millions of rural citizens who still live without a stable source of power.
The first phase of the Nagapattinam project will raise the refinery's output to between 120,000-180,000 bpd. The 300,000 bpd goal will be met at the completion of the second phase.
Earlier this week, Indian Oil Minister Dharmendra Pradhan said his country owed Iran over $2.55 billion in unpaid oil dues, mostly to the private company Essar Oil Ltd.
As of May of this year, Indian refiners owed their Iranian partners $6.11 billion, but the figured halved earlier this month when public companies in the subcontinent paid off their bills.
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"Following the lifting of sanctions on Iran on January 16, 2016 and re-establishment of banking channels from 20 May, 2016, Indian refineries have paid $3.563 billion out of $6.118 billion to Iran on account of payment due to National Iranian Oil Co (NIOC) for supply of crude oil," the Indian minister said.
Iran faced international economic sanctions for six years before January due to global fears that the country had been enriching uranium in order to pursue a nuclear weapon.
Since the beginning of this year when those sanctions were lifted, Tehran has been working on restoring the nation's oil sector back to its previous glory and winning back market share that it lost to Saudi Arabia.
By Zainab Calcuttawala for Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on… More