Conversation with engineer Dariush Daraee
vice president of Asfalt Tous Palayesh Qeshm Company

About Qeshm heavy oil refinery project

While thanking your company for this conversation, I would like you to explain about the implementation of the Qeshm heavy oil refinery project and what was done by Asfalt Tous  Company of Qeshm Refinery in this project.

 Asfalt Tous Palayesh Qeshm Company as the main contractor for the purchase, installation, pre-commissioning and commissioning of Qeshm Heavy Oil Refinery project from the client of the project, Pars Behin Oil Refinery Qeshm Company, which is a subsidiary of Pasargad Energy Development Company. He started his activity in this project in 2017. This refinery is one of the largest producers of bitumen in Iran, which is designed in two phases with similar products.

The first phase of the refinery (35,000 barrels per day) with the efforts of the company’s personnel has now reached the stage of exploitation and product sales. Each phase of this refinery has the capacity to produce one million tons of penetrating bitumen with grades of 50/40, 70/60, 100/85 and about 5,700,000 barrels of light oil cut per year. The design of this refinery has been done in such a way that light crude oil can be converted into naphtha, kerosene and diesel cuts if needed, and it is the only bitumen producer with “crude oil feed” that uses refining and storage facilities. And its own dock as a single complex, while having a strategic location, will have quality advantages and easy access for its customers.

The main units of the refinery are as follows:

• Crude oil distillation unit (35,000 barrels per day)
• Crude oil distillation unit including desalination, furnaces, towers and converters (35,000 barrels per day)
• Water purification unit (23000 kg/hour)
• Reservoirs and feed and refinery product transfer facilities

and peripheral units include:

• Water distribution system (refinery cooling water, drinking water and fire fighting water)
• Diesel and natural fuel gas distribution unit
• Air production and distribution unit
• Nitrogen production unit
• Souza burner unit
• Sewage treatment unit (including treatment and disposal)
• Industrial and non-industrial buildings

A major part of the purchase of equipment as well as all the steps of installation, pre-commissioning and commissioning have been completed by this company. During the installation and implementation phase of the refinery, the scope of work of this company included the installation and operation of process units, utilities and storage tanks, and the pre-commissioning and operation phase, the entire refinery was integrated into the implementation phase by the company’s expert forces and facilities. it is arrived.

How long was the project implementation schedule?

36 months were foreseen in the contract, but due to the things outside the job description assigned to us by the employer, such as the construction of buildings and the completion of the remaining civil activities, and due to the arrival time of some main project goods, until It was extended for 50 months. The temporary delivery of this refinery took place in December 1400.

Asfalt Tous   Refining Qeshm Company is proud to have implemented the project within 50 months by using Iranian capable forces and successfully completed all the stages of launching and extracting the product according to the defined standards.

What records and honors has the company achieved in this project?

In all stages of the work, this company’s approach has been to use its past experiences in oil and gas projects, and the result of these experiences is the procurement and installation of quality items from domestic and foreign sources. As the main subsidiary of Asfalt Tous   Company, this company has carried out construction and installation operations with maximum capacity and quality by using experienced teams, the bank of heavy and semi-heavy machinery available in the company, as well as timely financial and credit support.

Among the honors gained during the launch of the project, it is possible to mention the record of 7 days of obtaining a commercial product from the time crude oil enters the refinery.

Among other honors gained in this project is over six million man-hours without incident. This is done with training, continuous control, using conscious measures and using safety equipment.

The supply departments of this company carried out the purchase process of this project by concluding about 140 contracts with reliable domestic and foreign manufacturers and suppliers. The steps of selecting the builders until the delivery of the goods to the site have been completed in accordance with the requirements and specifications of the project and according to the integrated planning of the project.

The main volumes implemented in the project by Asfalt Tous Refinement Company of Qeshm are according to the following table:

• 210,000 inch diameter piping operations
• Cabling 650 km
• Installation of fixed equipment of 3,000 tons
• Installation of rotating equipment of 500 tons
• Implementation of complementary metal works of 1,000 tons
• Implementation of supplementary concrete works of 12,500 tons
• Implementation of non-industrial buildings of 2,300 square meters

In your opinion, what were the main challenges and positive points of this project?

The first challenge is working on the islands. Fortunately, Asfalt Tous   is familiar with this category and had previously gained experience in the oil projects of Khark-Siri-Behrgan-Kish and Qeshm islands. But for this project, a new company was established in Qeshm. This company was established for the strategic goals that we had in Qeshm and it is a center for focusing on the company’s Qeshm projects and a good relationship has been established with Qeshm Free Zone Organization, Labor Department, Governorate and Police Force and Health and Environment of Qeshm. This infrastructure work has encouraged other employers to use our facilities on this island. Also, last year, we managed to obtain another project from Qeshm Oil Investment Company and build their tanks, which we are currently following.

The second challenge was bank correspondence and problems in following up on the financial issues of this project. The financing of this project was done by the employer from the National Bank of Iran, Hamburg branch, and it was a foreign currency project, and this issue had its own challenges, and in order to get the money, we had to go through a long bureaucracy. The country was in a state of embargo and doing the work required its own special skills. Despite our past experience in this project, our business partners encountered various issues that we had practically never encountered before. Because we used to act through letters of credit and were aware of its issues in projects.

The third challenge was the issue of transporting goods and it was done with its own measures and we needed to use different ships. The goods and equipment were moved several times until it finally reached us. The issue of clearance in this project, considering that the free zones have their own rules and at the same time their customs issues are subject to the customs of the motherland, caused problems in the speed of our work and for this we had to appoint a separate group to Follow up customs and clearance issues, however, this added to the experience of our colleagues and usually such experiences are not obtained cheaply.

The fourth challenge was the cash flow of purchases in the project. We had to pay the price of the goods at the time of purchase and we also paid the shipping and customs fees, while receiving these fees from the employer was done with a significant delay. This issue sometimes caused us to have a negative cash flow and it was necessary to manage this issue in order to move forward. Due to internal strictures and sanctions, this work had its own problems for the company.

Among the positive points of this project, we can mention the performance of engineering operations that were contractually outside of our obligations. Usually, in PC projects, the approach of contractors is not to use the engineering group, but we looked at this project as an EPC, and this work resulted in costs for the company, but today, when we look at it, we see that this work was worth the cost to avoid rework. and to speed up the purchase and execution operations, if the company’s engineering was not proficient in doing the work, this important thing would not have happened.

Before sending the purchase documents to the manufacturers, we reviewed the documents and agreed with the client’s engineering and project management, and the result of this agreement was to match the inquiry and shorten the purchase process, and the technical clarification of the manufacturers was done properly. Of course, after the arrival of the goods, the installation and commissioning procedures were done well, and this is a good strategy that we will use in PC projects from now on, and it can be considered by other contractors in the projects.

Among other positive points in this project, we can point out the very few punch list items (the list of executive defects before launch). In similar refinery projects, it is common to have up to a thousand items in the punch list, but in this project, no more than three hundred items were seen, which of course were all minimal and small defects that should have been reviewed after the start-up, and yet now Most of these bugs have been fixed.

How much internal power can be used in these projects?

One of the concerns of the macro management of the country these days is the use of internal power. In my opinion, strengthening domestic production, in its appropriate form, is beneficial to all project stakeholders.

First, it brings employment to the countrymen, secondly, the cost of purchasing goods is saved, thirdly, due to easy and quick access to the manufacturing site, more and more detailed inspection will be done compared to the goods produced abroad. . And lastly or most importantly, by using a suitable domestic manufacturer and continuous supervision to accelerate the construction, it is possible to achieve the construction of the project equipment in a shorter time, and since the transportation distance to the site is short and there is no customs clearance formalities. , it will reach the project site and be installed much faster, and this will shorten the critical path to the operation and production of the projects and optimize the overhead costs.

However, it is important to properly manage this matter at the national level. The use of internal power in the implementation of projects differs according to the type of project. For example, in the oil industry, in some projects that are complex and have a license, such as petrochemical and petrochemical projects, the internal knowledge and power may not be available to produce all the products, while for simpler projects such as pump houses, tanks or oil pipelines, in the current conditions, up to 80% can be used from internal power. Identifying and directing which projects or which parts of them we are allowed to use internal facilities, or which are the right manufacturers for each specific equipment, should be the responsibility of an expert body consisting of experts in the construction and implementation of industrial projects.

Some manufacturers have done a good job of transferring experience and knowledge for production and have the satisfaction of the employer and the contractor, but sometimes there are profit-seeking people who want to travel the hundred-year-old route overnight and introduce it domestically by importing and changing the appearance of the product. and this causes some manufacturers to turn from an average manufacturer to a weak broker. By doing this, the buyer’s price will be raised and at the same time it will be longer and the product will not have the required quality.

To what extent is it possible to use local forces in projects and with what solutions can we achieve it?

The use of local forces has been more successful than domestic production. If workers and technicians come to work in the morning and return to their families in the evening, they will be more efficient. Professional knowledge is better developed with indigenous forces, and governorates and free zone organizations have good supervision and practical guidelines for employing indigenous people.

At Tous Refinement Qeshm Asfalt Company, we use local people to provide manpower according to the long-term vision of the company to be present in the region, and we actually believe that we have been successful.

In conclusion, I would like to acknowledge the unquestionable support of the top management of Tos Asfalt Company, the effective interaction of the respected employer Behin Qeshm Oil Refining Company and Soroush Dynamic Energy Company, the efforts and seriousness of the manager (Mr. Engineer Shibani) and the project team at the Tehran site and office. And I would like to express my utmost gratitude for the constant assistance of the financial, administrative, purchasing and all departments of the company, who sincerely and committedly helped us in accomplishing this task.

Thank you to your company for conducting this conversation