To increase heavy crude processing capacity, the Oil Ministry and a group of banks and private sector firms have signed memoranda of understanding worth $17.8 billion to build two refining complexes in southern Iran.
The MoUs were signed in the presence of President Ebrahim Raisi and Oil Minister Javad Owji in Tehran on Monday, IRNA reported.
According to the Oil Ministry, the two projects are expected to boost NIOC’s refining capacity by at least 600,000 barrels per day over the next five years.
Giving a breakdown, Owji said the first MoU worth $11.1 was signed by Bank Refah Kargaran, Tejarat Bank, Bank Melli Iran, Tadbir Energy Development Group, the Persian Gulf Petrochemical Industries Company, Ahdaf Investment Company and the National Iranian Oil Refining and Distribution Company to build Shahid Soleimani Petro-Refining Plant in Bandar Abbas, Hormozgan Province.
“With a heavy crude refining capacity of 300,000 barrels per day, the plant will increase the production of gasoline and other value-added products,” he added.
Petro-refineries integrate refining and petrochemical processes to produce both fuels and raw materials for petrochemical companies.
Such plants have boosted the profitability and development of petro-refineries in developed countries.
The minister noted that raising the gasoline output is important to prevent fuel shortage in the near future.
In February, Owji warned that if domestic consumption continues to grow, Iran could become a gasoline importer again within a few years.
Iran imported gasoline until 2019 when Persian Gulf Star Refinery was launched and made the country self-sufficient in the production of the fuel.
However, as consumption has had an upward trend since then, officials expressed concerns and devised projects to increase the refining capacity.
Speaking about development plans in other refineries, Owji said the quality improvement plan has been defined in the form of eight projects for the refineries of Bandar Abbas, Tehran and Tabriz.
The projects are expected to be completed in three years, generate value added, create employment and help preserve the environment, he added.
Mokran Refinery
Referring to the second MoU signed by Mofid Economic Group, Bank Mellat, Parsian Bank and Tejarat Bank, the oil minister said Mokran Refinery will be built in Jask Port, Hormozgan Province, with a processing capacity of 300 barrels of heavy crude.
The MoU is worth $6.7 billion and the plan is projected to become operational in 2027.
NIOC has boosted its crude oil refining capacity by 11 million liters per day in the last 12 months.
According to IRNA and based on data from the Oil Ministry and the National Iranian Oil Company, the processing capacity has risen from 270 million liters per day in 2021 to 281 million liters per day in 2022, up 4% in the one-year period.
Giving a breakdown, the state-run news portal noted that Euro-4 quality diesel production capacity has experienced a 17% rise, reaching from 35 million liters per day to 41 million liters per day.
Gasoline output has also soared by 2% over the period to exceed 105 million liters per day.
“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, has risen by 1 million liters per day,” Mohsen Khojastehmehr, managing director of NIOC, said.
“Lavan's gasoline output capacity has reached 3.8 million liters per day.”
The official noted that NIOC’s refining capacity has returned to levels not seen before the US withdrawal from the nuclear deal and reimposition of sanctions on Iran's crude sales in 2018.
"The plan to raise oil production capacity was implemented at an estimated cost of $500 million," he said.
“The money was mainly spent on digging new wells and installing electric submersible pumps in marginal and abandoned wells whose output level had decreased substantially.”
The Isfahan Oil Refining Company in Isfahan Province has recently launched a sulfur granulation unit with a daily capacity of 300 tons. The move is in line with policies to reduce environmental pollution and upgrade the quality of refined products.
The company has succeeded in extracting aromatic compounds, sulfur and benzene from AW-406 solvent and converting it to ++AW-406 solvent.
Khojastehmehr said 19 development plans are being carried out across the country and upon their completion, NIOC’s refining capacity will increase by 1.5 times to reach 3.5 million barrels per day.
Referring to one of the major projects in Bandar Abbas Refinery, the minister said, “One of the products of the refinery is mazut that will be turned into petroleum coke to create value added.”
The Research Institute of Petroleum Industry has completed a pilot scheme to convert mazut to higher value-added products, including petroleum coke for use in steel production.
The institute has signed a contract with Bandar Abbas Oil Refinery for the mass production of coke, which will help Iran become self-sufficient in the product.
