The second phase of Abadan Refinery expansion plan in Khuzestan Province has registered 92% progress and its completion is expected in summer, the project operator said.
“The venture includes the installation of new units, including hydrogen processing, hydrocracking, liquefied petroleum gas, crude distillation and other utilities to replace old units built 70 years ago,” Ahmad Farzaneh was also quoted as saying by the Oil Ministry’s news portal.
Because the crude processing facility is being equipped with HPUs, it will not only help improve environmental conditions but also increase the supply of products complying with Euro-5 emission standards, he added.
“The refinery will also have a sulfur recovery unit to reduce mazut output to less than 25% from the present 50%,” he added.
Farzaneh noted that the project, which started in 2017, has so far cost $1.3 billion and it is expected to boost the production of Euro-5 gasoline and jet fuel by 10%.
Built in 1912, Abadan Refinery is the first of its kind in Iran and was once the largest in the world.
The refinery, heavily damaged during the 1980-88 Iran-Iraq war, produces 460 tons of propane, 16,000 barrels of butane, 60,000 barrels of gasoline, 66,000 barrels of diesel per day. It also meets 25% of Iran’s annual need for jet fuel.
It is now operating with a daily capacity of refining 250,000 barrels of crude.
“Although the new crude distillation unit will have a production capacity of 210,000 barrels per day, 40,000 less than the combined capacity of the three decommissioned units, it is exported to help upgrade gasoline and diesel quality to the Euro-5 standards.”
According to the official, the unit will reduce the production of heavy products such as kilns while increasing the output and quality of value-added light-duty products such as jet fuel.
The third phase that is projected to cost $2 billion will add more high-tech units to the facility, some of which are a kerosene hydrotreating, isomerization, naphtha hydrotreaters and continuously catalyst regenerative.
Inadequate Investment
Inadequate investment has severely impaired National Iranian Oil Company’s ability to process crude, which explains the firm’s declining refining capacity over the past eight years.
According to data from the Oil Ministry and NIOC, the failure to capitalize on the private sector’s experience, absence of rehabilitation plans and the focus on the sale of low value-added products have reduced oil processing capacity by 231,000 barrels per day since 2013.
Refining complexes across Iran processed 2.3 million barrels of crude per day in 2013, which capacity has now dwindled to 2.1 million, registering an 11% decline.
Abadan, Bandar Abbas and Isfahan refining facilities have experienced the largest decline of 68,000 barrels, 48,000 barrels and 44,000 barrels in processing capacity respectively over the eight-year period.
According to Oil Minister Javad Owji, boosting the quality and output of oil refineries and building new refineries are on the agenda to help increase Iran's oil refining capacity by 1.5 times in five years.
“Development programs are underway to bring the country’s refining capacity, including crude oil and gas condensates, to 3.5 million barrels per day from the current 2.1 mb/d,” he said.
“Investors have been identified for generating and developing refining capacity, and they have signed agreements with the Oil Ministry in this regard.”
