Mazut Reduction Plan Needs $3b

Mazut Reduction Plan Needs $3bMazut Reduction Plan Needs $3b

Converting Mazut to higher value added products such as gasoline and diesel is among Oil Ministry's main development plans whose implementation requires an investment worth $3 billion.

Speaking on the sidelines of his official visit to Bandar Abbas Refinery, Abbas Kazemi, managing director of the National Iranian Oil Refining and Distribution Company, added that foreign investors have shown interest in funding the project and plans have been made to launch the venture with the help of the private sector, IRNA reported on Thursday.

Pointing to the fact that domestic and foreign financiers want the government to assure them of their investment return, the official noted that investors will reap benefit as soon as gasoline production units go on stream.

On mazut reduction plans by undertaking fuel quality enhancement projects, the official said, "Mazut output in refineries stands at 30% on average, yet it will decrease to less than 10% as cutting-edge refining processes are employed. The administration has targeted the reduction of mazut production in refineries by 2% per annum, making it less than 10% under the 20-year Vision Plan."

Approved in 2005, the Vision Plan aims to promote the country's status at the national, regional and international levels and become a developed state by 2025. Kazemi stressed that the excessively high production capacity of mazut in Iranian refineries has substantially reduced their profit margin.

"As long as refineries' shareholders do not make strategic plans to convert mazut to higher value-added products such as gasoline or diesel, they will have to continue their business with the lowest profitability ratios as most states have started to use liquefied petroleum gas instead of mazut," he said.

Elaborating on the importance of undertaking fuel quality enhancement projects in old refineries, the NIORDC chief said, “Serious negotiations are underway with Japan, China and South Korea to implement such projects in Abadan, Lavan and Bandar Abbas refining companies.”

According to the official, applying quality enhancement techniques helped Iran embark on the export of diesel and other oil byproducts last year. He also hoped that Iran will begin gasoline export as soon as the Persian Gulf Star Refinery becomes operational by the yearend.

Asked about gasoline production development plan in Bandar Abbas Refinery, Kazemi noted that the implementation of the project in six months will raise its output by 3 million liters and increase its capacity to 12 million liters.

Bandar Abbas Oil Refinery produces oil byproducts such as liquid gas, lead-free super gasoline, jet fuel, kerosene, gas oil, raw material for grease, fuel oil, bitumen and sulfur.

Isfahan Oil Refinery's director for maintenance and repair, Nader Kheiri, announced that there are plans to produce Euro-4 quality diesel from mazut in the refinery in the near future.

According to the official, as part of the plan to enhance production efficiency at the refinery, mazut will be delivered to five production units to produce diesel.

The NIORDC chief believes that Isfahan refinery's development plan is of great importance and as soon as it becomes operational, a large number of cities and towns located in the vicinity of this province will be supplied with Euro-4 gasoline.

Mazut is a heavy, low quality fuel oil, used in power generating plants and other similar applications.