Oil Refining Capacity to Hit 1.85 Million bpd

Oil Refining Capacity to Hit 1.85 Million bpdOil Refining Capacity to Hit 1.85 Million bpd

Plans have been made to increase the country's oil refining capacity to 1.85 million barrels per day by completing development initiatives by the end of the current Iranian year (started March 20), the head of quality control at the National Iranian Oil Refining and Distribution Company said on Monday.

“Achieving the objective will definitely depend on the refining complex's overhaul regarding their feedstock and final products as well as the completion of development plans, the biggest of which is the 360,000-barrel-a-day Persian Gulf Star,” Saeed Mahjoubi was quoted as saying by Shana.

"The refineries to be upgraded are in Isfahan, Tabriz, Tehran, Bandar Abbas and Abadan. The government will pay for Abadan plant’s modernization and is seeking investors to fund the others," he said.

"Based on assessments, $14 billion in investment are required to upgrade units at five refineries to produce gasoline that burns more cleanly than grades currently available in the country."

Mahjoubi noted that plans call for attracting not only domestic investment but also international funds to expedite the development process.

Asked about producing gasoline and gasoil, he added that strategic commodities should be compatible with Euro-4 standards that are being followed closely in NIORDC.

Pointing to NIORDC's priorities to reduce the refineries' mazut production and fuel consumption, Mahjoubi said, "Improving the quality of oil byproducts and undertaking mazut reduction initiatives top NIORDC's priority list. Moreover, the judicious use of energy has already been highlighted in all refining units."

Oil officials believe that mass production of mazut is refineries' Achilles' heel in the Persian Gulf state.

Refining companies were given a five-year deadline by the Cabinet to implement upgrading plans aimed at improving the quality of oil products last year.

------- Judicious Energy Consumption

Underscoring the fact that the plan to save energy in refineries was formulated two years ago, the official added that all refining complexes are being monitored on a regular basis and special workgroups are in charge of inspecting refineries regarding energy consumption.

According to Mahjoubi, the workgroup is also responsible for implementing strategies in refining units on how to optimize the use of energy.

Based on the workgroup's report, energy consumption in refineries is analyzed and the best alternative to conserve energy is presented.

Stressing that energy consumption in Iran's refineries ranges between 5 and 7%, Mahjoubi noted that the purpose of the initiative is to help refining units reduce their energy consumption as much as possible.

------- Feasibility Study

Japanese engineering company Chiyoda Corp. is conducting a feasibility study with Mitsui & Co. in the Bandar Abbas project, said Masaru Akamatsu, a Chiyoda spokesman.

Akamatsu said Japan’s Ministry of Economy, Trade and Industry is paying for a part of the study.

The modernization contract is worth about $2.8 billion, Japanese broadcaster NHK reported in February. Akamatsu declined to comment on the value of the upgrading project.

Daelim Industrial Co., based in South Korea, and Marubeni Corp. and Mitsubishi Corp., both with headquarters in Japan, are also interested in working on refinery projects in Iran, Abbas Kazemi, managing director of National Iranian Oil Refining and Distribution Company, said. A spokesman for Daelim declined to comment, asking not to be identified because of company policy.

Iran plans to build three new refineries: the 300,000-barrel-a-day Bahmangenoo plant at the port of Jask, a 150,000-barrel-a-day facility at Anahita in western Kermanshah province and Pars Refinery, which will process 120,000 bpd of condensate.

Iran, OPEC’s third-largest oil producer, is boosting energy output after international sanctions curbing its access to oil markets were eased in January. Since then, Iran has restored oil production near pre-sanctions levels and increased output of natural gas in the offshore South Pars field, part of the world’s largest deposit.