Tabriz Refinery will start production of diesel compatible with the Euro-5 emission standard as soon as the desulfurization unit of the plant becomes operational, head of the refinery said.
“The project will be developed at an estimated cost of $135 million and plans call for encouraging domestic firms to participate and invest,” Mohammad-Bagher Dakhili was quoted as saying by IRNA.
Feasibility studies to make the refinery’s diesel output compatible with Euro-5 standard have been conducted and preliminary agreements have been reached with an unnamed international company for financing the project, the official added.
“Tabriz Refinery is the first complex in Iran to launch such an initiative,” Dakhili said, adding that diesel accounts for 40% of the refinery's production basket.
Plans have been made to complete light and heavy naphtha isomerization units to manufacture gasoline which complies with Euro-5 standard.
Pointing to the refinery's eco-friendly plans, he noted that operational phases of the project to curb massive volumes of associated petroleum gas (APG) from flaring has come to an end and will come on stream in the near future.
APG is a form of natural gas found with deposits of petroleum. It is often released as a waste product from the petroleum extraction industry. When it is burnt off as gas flares, it is referred to as flare gas.
Unwanted Mazut Output
The key refinery is in negotiations with Japan’s JX Nippon Oil & Energy Company on reducing the complex's mazut output, but talks have not come to fruition yet, said Saeed Mahjoubi, National Iranian Oil Refining and Distribution Company director for coordination and supervision.
"The plan calls for reducing mazut production from the current 28% to 10%," he said. Improving the quality of oil byproducts, especially gasoline and diesel, to meet international norms tops policies in the refining industry.
“Although Iran’s refining capacity for crude oil and condensate stands at 1.8 million barrels per day, the excessively high production of mazut in Iranian refineries has substantially cut profit margins,” he added.
Analysts believe that due largely to the high production of mazut in refineries, most refiners will go bankrupt unless they receive financial backing from the government.
Moreover, many refineries need huge investments to upgrade their aging infrastructure and employ state-of-the-art technology to convert mazut into byproducts with higher value added.
