Iran Crude Refining Capacity Steady

Iran Crude Refining Capacity SteadyIran Crude Refining Capacity Steady

A senior oil official says Iran's crude processing capacity has not declined, stressing that it fluctuates based on the market demand.

"Iran's nominal crude refining capacity, including for gas condensates, stands at 1.6 million barrels per day. Nonetheless, it can be expanded to 1.8 million barrels if there is demand," said Abbas Kazemi, managing director of the National Iranian Oil Refining and Distribution Company, Shana reported.

Processed crude was mostly consumed domestically in the past few years. But now that the domestic market is almost saturated, more refined commodities are exported.   

Kazemi said Iran needs private investment to complete several major refinery projects, including the Persian Gulf Star Refinery in the southern port city of Bandar Abbas, Anahita Refinery in Kermanshah Province, Siraf  Refining Park in Bushehr Province, Bahman Geno Oil Refinery in Jask, as well as Pars Refinery in Shiraz,

"As soon as these pending initiatives come on stream, Iran's refining capacity will witness 70% rise, reaching 3.2 million barrels a day," he noted. Talks are underway with the private sector to attract the much-needed funds and put the plans into operation as soon as possible, he said.

To attract and encourage investors, the government has decided to offer 10% discount on Anahita and Bahman Geno refineries' feedstock. Moreover, Anahita Refinery's pipeline project will be implemented by the government.

Kazemi believes that such incentives can and should encourage private companies to invest in mega projects.

According to Oil Minister Bijan Namdar Zanganeh, crude processing capacity will reach 3.2 million bpd by the end of the sixth five-year development plan (2021) and early in the seventh plan.

The plan calls for reaching the pre-sanctions oil production level of 4 million bpd. Output hit a 25-year low of 2.7 million bpd in 2012 after the US and the European Union tightened sanctions over the nuclear program.

Iran was once the second-biggest producer in the Organization of Petroleum Exporting Countries, but the international restrictions significantly cut its exports as it conceded market share to Iraq, now the second-biggest OPEC producer after Saudi Arabia.