The production of Euro-4 compliant gasoline at Lavan Oil Refinery, a subsidiary of the National Iranian Oil Refining and Distribution Company in the southern Hormozgan Province, will rise by 1 million liters per day in the near future, managing director of the oil refining company said.
“Upon the launch of a new isomerization unit, Lavan's gasoline output capacity will reach 3.8 million liters per day,” Mohammad Ali Akhbari was also quoted as saying by ISNA.
The new unit is being installed and will become operational soon, he added, noting that the facility will use domestically-produced catalysts.
Isomerization units convert linear molecules to higher-octane branched molecules for blending into gasoline or feed to alkylation units. The octane rating or octane number is a standard measure of the performance of an engine or aviation fuel. The higher the octane number, the more compression the fuel can withstand before detonating (igniting).
“In the face of sanctions imposed on Iran’s energy sector, NIORDC has signed several contracts with domestic producers for providing catalysts needed in gasoline production process,” Akhbari said.
“A petro-refining complex — a major petrochemical and refinery project in the southern province — will also be constructed adjacent to the old refinery to raise the facility’s crude processing capacity by 150,000 barrels per day.”
According to the official, the refining complex saved about $30 million by using indigenized parts and equipment manufactured by domestic companies instead of importing them.
“Nearly 25,000 items have been produced for the first time at the refinery’s request, using the expertise and capacity of local manufacturers, and this has saved the company’s expenses,” he said.
Speaking about the refinery’s profit, Akhbari said, “Using all its capacities, Lavan Oil Company achieved the highest net profit since the beginning of its activities in the last Iranian year [ended March 20, 2021].”
The company made a profit of $66 million last year, he added.
Founded in 1976 on Lavan Island, the refinery has a capacity of 55,000 barrels of oil per day. It receives 35,000 barrels of crude oil from Salman, Reshadat, Balal and Resalat offshore oilfields as well as 20,000 barrels of ultra-light condensates from South Pars Gas Field.
The refinery’s total gasoline production capacity is 2.8 million liters per day and its quality meets Euro-4 standards. It also produces 4 million liters per day of diesel and 100 tons of LPG a day.
Lavan Island is situated 18 kilometers south of the Persian Gulf coast. The region produces 105,000 barrels of oil per day.
The island has a two-berth jetty, which can accommodate vessels weighing up to 250,000 deadweight tons. Its storage capacity is 5.5 million barrels.
Upward Trend
According to Keramat Veiskarami, the head of the National Iranian Oil Products Distribution Company, daily demand for gasoline has experienced an uptrend over the last six months and amounted to 90 million liters.
NIOPDC, a subsidiary of the National Iranian Oil Company, produces close to 115 million liters of gasoline per day, of which 52% are produced by the Persian Gulf Star Refinery and the rest by Shazand Refinery in Arak, Markazi Province, Tabriz Refinery in East Azarbaijan, Abadan Refinery in Khuzestan Province and Lavan and Bandar Abbas refineries in Hormozgan Province.
Iran has improved the distribution of cleaner gasoline in recent years, but wide-scale supplies of low-quality diesel and slack environmental rules are delaying efforts to effectively curb air pollution.
As restrictions imposed to help fight Covid-19 have been removed, fuel demand is returning to levels it reached before the coronavirus outbreak.
NIOPDC has predicted gasoline consumption to exceed 130 ml/d by 2024, in which case 15 million liters of fuel have to be imported because the company’s maximum production level is 115 ml/d.
It is reported that 13 million liters of gasoline in the capital city and 17 million liters in the province are consumed daily. In fact, residents of Tehran Province consume more gas than Poland, with its 40 million population and Turkey’s 80 million.
The government pays huge subsidies – close to $50 million per day – for gasoline.
Global Average
Per capita gasoline consumption in Iran, with a population of 83 million, is above the global average.
According to data from the Oil Ministry and NIOC, gasoline consumption in Iran has surpassed 85 million liters, i.e., 10 times more than Turkey with almost the same population.
Drawing a parallel between Iran and more populated countries like China, the NIOC data revealed that close to 450 million liters of gasoline are burnt in China daily while its population is over 1.5 billion, meaning gasoline consumption in Iran is threefold higher than that of China.
NIOPDC started to export the fuel to international markets, namely Iraq, Afghanistan, the Persian Gulf littoral states and the semi-autonomous region of Iraqi Kurdistan in 2019.
Nonetheless, experts have warned that if the consumption rate continues to grow at the same pace, the company will have to stop exporting gasoline and import it to meet ever-growing demand in less than two years.
Each liter of gasoline is sold at 7.5 cents in Iran whereas the same amount of fuel can earn 55 cents when exported.
