TEHRAN, 16 October 2007 — Talks with Saudi Arabia and Malaysia on establishment of two power plants in Fars and Zanjan provinces are under way, deputy head of Iran Power Development Company (IPDC), Mostafa Ali-Rabbani, announced here Saturday, IRNA news agency reported on Sunday, a copy of which was sent to Arab News.
The power plants will be built on the build-own-operate (BOO) or build-operate-transfer (BOT) basis, the English-language daily Tehran Times quoted him as saying. Ali-Rabbani termed it a novel strategy in the country’s energy sector.
The first private BOT power station was 954MW South Isfahan, he recalled, calling similar projects economical.
The official predicted a great presence of foreign and domestic private organizations in the projects in near future in line with enforcement of the Article 44 of the Constitution.
Referring to the facilities and guarantees that the Ministry of Energy gives to the investors, the deputy head of IPDC announced Iran did not witness such supports in the past five years.
Within the first four months of the last Iranian year (ended March 20, 2007), 10 power stations became operational with a 1,592MW capacity.
Meanwhile, Iran needs to request an extra two billion dollars to import petrol after its original budget allocation ran out half way through the year, the ISNA news agency reported yesterday.
The shortfall comes despite a rationing plan imposed in June that aimed to curb Iran’s massive imports of refined oil products made necessary by its frenzied consumption and lack of refineries.
“For imports of petrol and diesel in the second half of this year, we have asked (the oil ministry) for $2.3 billion,” the managing director of National Iranian Oil Products Distribution Company, Nouredin Shahnazi Zadeh, was quoted as saying.
Some $1.5 billion of that figure is needed for petrol and $830 million for gas oil, he explained.
He said that rising global market prices had already meant the budget for imports of petrol for the Iranian year to March 2008 had been exhausted. The budget allowance had been set by parliament at $2.5 billion, and the government will now need to ask parliament for the extra allowance to last the rest of the year.
Iran is the world’s fourth largest oil producer, but its lack of refineries and colossal consumption encouraged by a heavy state subsidy on fuels means it must import 40 percent of its petrol requirements. But Shahnazi Zadeh argued the rationing was having a serious effect on consumption. “The rationing plan resulted in a 22.5 percent decrease in petrol consumption,” he said.
compared to the same period last year.” He put Iran’s average petrol consumption at 60 million liters a day since the implementation of the rationing plan on June 22, and said that the domestic refineries would produce close to 46 million liters a day.
The state subsidy for petrol alone amounted to about $5.8 billion in the first six months of the year (March-September), Shahnazi Zadeh said.
The total subsidy so far paid this year on the main fuels derived from crude oil is $17 billion, which would double by the end of the year, he said.