The Central Bank of Iran is currently holding negotiations with China on financing the second development phase of Abadan Oil Refinery in Khuzestan Province, the managing director of the National Iranian Oil Engineering and Construction Company said.
“We hope the talks would bear fruit until March 20, which will provide €1.7 billion [$2.09 billion] in investment to materialize a part of the phase’s total required finance [€2.7 billion],” Hamid Sharif Razi was also quoted as saying by ISNA on Tuesday.
In an earlier stage, Iran's oldest crude processing facility attracted $1.05 billion in finance from China's Sinopec Engineering Company in a deal signed in December to develop the second phase of Abadan Oil Refinery, Nikkei reported.
Razi noted that the second development phase of the refinery, which is being implemented by a consortium of Iranian and Chinese companies, is aimed at building a new refinery with an oil processing capacity of 210,000 barrels per day in the Abadan refinery’s latest section that was constructed over 40 years ago and its current capacity stands at 150,000 barrels per day.
“Thus, a new refinery with a capacity to process a total of 360,000 barrels a day will be built on the site,” he said.
Commissioned in 1912, Abadan refinery is the longest-running Iranian crude processing plant and one of the largest in the world.
The refinery was heavily damaged during the 1980-88 Iran-Iraq War. It is now operating with a daily processing capacity of around 400,000 barrels.
“Abadan refinery’s feedstock, currently standing at 400,000 bpd, will be reduced, while more commodities of higher quality will be produced,” Razi said.
On the rate of mazut production in the refinery, the official stressed that the rate is planned to be curbed from the present 40% to about 26% in the second phase.
Development Phases
Noting that Abadan refinery is slated to be developed in four phases, Razi said that in the first phase, which has been carried out by NIOECC, the refinery’s distillation unit was upgraded, while the third phase’s goal was to build a fluid catalytic cracking unit that has also been accomplished.
FCC is one of the most important conversion processes used in petroleum refineries. It is widely used to convert the high-boiling, high-molecular weight hydrocarbon fractions of petroleum crude oils into more valuable gasoline, olefins and other products.
“The refinery’s amount of mazut output is due to be dragged down to less than 10% in Phase 4,” he said, stressing that currently, an Iranian-Chinese consultancy firm is carrying out studies to select the best feasible process to fulfill the goal, which is expected to be completed in early June.
Razi added that following the selection of the process, basic studies of the plan will be started, which can take 9-12 months.
"The fourth phase will probably be handed over to a contractor through tender," he said.
