Baku, Azerbaijan, Feb.6
By Dalga Khatinoglu – Trend:
Iran started upgrading its biggest and oldest refinery to decrease the share of fuel oil in the total output.
Currently about 40 percent of refined oil is converted to fuel oil and it is unprofitable right now, Iran’s Oil Minister Bijan Zanganeh said, Shana news agency reported.
According to the minister, the loss of Abadan refinery reaches $600-700 million annually.
China has opened a credit line worth $1.3 billion for developing Iran’s Abadan refinery and China Petroleum & Chemical Corporation (Sinopec) has started this $3-billion project.
During the first phase, a new refinery unit with 210,000 barrels per day of capacity would be constructed and the volume would reach 360,000 b/d in the second phase.
Currently the capacity of Abadan refinery stands at 400,000 b/d.
The project is aimed at reducing the share of fuel oil in the final products basket from the current 40 percent to about 20-22 percent.
Iran plans to invest $14 billion to renew six of nine refineries, aimed to decrease the fuel oil share in the total output from the current 24 percent to below 10 percent in average.
Iran has signed contracts with South Korean and Chinese companies to upgrade its refineries, while a new contract with Japanese companies worth $3.6 billion is expected to be sealed soon, CEO of the National Iranian Oil Refining and Distribution Company (NIORDC) Abbas Kazemi said Feb.1.
Besides the Abadan project, Iran has signed a $2-billion agreement with South Korean Daelim company to develop the Isfahan refinery and it’s expected that Japanese Marubeni, Mitsui and Chiyoda Corporation will sign agreements worth $3.6 billion with Iran to upgrade its refineries.
Iran’s oil refining capacity stands at 1.8 mb/d, but currently it uses only 1.68 mb/d of the nominal capacity.