The scope of works is to improve refined products to Euro 2005 quality specifications as well as to increase incremental output.

Abadan is Iran's oldest refinery and was opened in 1912. It now has capacity of 450,000 barrels a day (b/d), making it one of the largest in the Middle East. The upgrade project is part of a raft of schemes designed to boost refining capacity to meet domestic petrol consumption by 2010.

Iran now imports about 40 per cent of its petrol despite having the world's second largest reserves of crude oil.

Another project, tendered at the same time as Abadan refinery, is having trouble attracting bidders. The Arak refinery upgrade, expected to be worth $1,600 million, will involve the expansion of capacity to 250,000 b/d from 170,000 b/d. In March, NIOEC asked companies to prequalify for the Isfahan refinery expansion, for which Paris-based Technip recently carried out the basic engineering package.