The Chinese will reopen a credit line to finance the development of the Abadan Oil Refinery in the southern Khuzestan Province in the present Iranian year (ends March 2016), an official at the refinery said Sunday.
Fardin Alamdari, head of the refinery’s development and expansion program, said Iran and China have reached a final agreement to open the first LC for the major refinery before the year is out, Mehr news agency reported.
The investment is estimated at $2.5 billion, with the Chinese providing 85 percent of the amount. “Development and completion of phase 2 of the refinery will take at least four years after the LC is opned,” he noted. Under a EPC (engineering, procurement and construction) contract, the two sides will have an equal share in carrying out the project. The new investment plan calls for reducing the production of oil byproducts with low value-added such as mazut and increase the output of more products such as Euro-4 quality gasoline and diesel.
Abadan refinery was badly damaged during the initial stages of the Ba’athist invasion in the 1980-88 Iran-Iraq war. Its oil output is presently estimated at 429,000 barrels per day.
The first oil wells in the Middle East were discovered and drilled in 1908 in Masjed Soleyman county, north of Khuzestan Province. The oilfield came into operation three years later when its output was piped down to a newly built refinery at Abadan.
