Iran mulls Spanish refinery as Europe seeks alternatives to Russian energy

Just two days after sanctions imposed on Iran were lifted on 16 January, it emerged that Spain and Iran are in talks over building an Iranian-owned oil refinery in Spain, a sign that trade and deals between the Islamic Republic and Europe are set to increase.

The site, at the Spanish port city of Algeciras, across from the Rock of Gibraltar (pictured), had previously been reserved for Russia’s state-owned oil company Rosneft, but that deal fell through after the EU imposed sanctions on Moscow in 2014.

The news comes as the European Commission plans to visit Iran next month to explore forging energy ties with Iran to reduce Europe’s dependence on Russian gas.

Our political relationship with Iran is very good because we moved faster than other countries and are now very well placed for future business– Spanish foreign minister José Manuel García-Margallo

Spain’s foreign minister José Manuel García-Margallo revealed the refinery talks on 18 January in Brussels, ahead of a meeting of EU foreign affairs ministers there.

Spain was a major buyer of Iranian oil before sanctions were tightened in 2012, and García-Margallo said the Iranian deal would be the first among many.

"The entire Iranian energy industry needs to be rebuilt," he said, reported The Wall Street Journal. "Our political relationship with Iran is very good because we moved faster than other countries and are now very well placed for future business."

García-Margallo added that an Iranian refinery in Algeciras would create jobs in a region that has the country’s highest unemployment rate.

A day earlier, the European Commission announced it was sending a "technical assessment mission" to Iran in February to explore energy ties, reports Reuters.

An unnamed EU official told Reuters that around 15 EU officials would go on the initial four-day visit.

European Climate and Energy Commissioner Miguel Arias Canete said on 17 January that the target for for cooperation included all areas of energy – nuclear, oil, gas, renewable energy and energy efficiency.

According to Reuters, Canete emphasised developing liquefied natural gas and also pipeline shipments through a route the EU calls the "Southern Gas Corridor" to carry supplies into southern Europe as an alternative to Russian gas.

Photograph: The Rock of Gibraltar lies across the bay from the Port of Algeciras, Spain, the site of the refinery under discussion (Joe Vinent/Wikimedia Commons)