Managing Director of Abadan Oil Refinery Company Esfandiar Daemolzekr informed reportes about the latest development status of and the plan to reduce fuel oil production in the oldest oil refinery of the Middle East saying “in partnership with China’s Sinopec, the plan to equip, develop and upgrade Abadan refinery will kick off as of the new Iranian calendar year (to begin March 21).”

The official recalled that the second development contract was inked with the Chinese side following implementation of the Joint Comprehensive Plan of Action (JCPOA) asserting “the initiative aims to boost profitability and reduce fuel oil production form the current 40% to less than 20 per cent.”

He emphasized that the refinery project required three billion dollars of investment adding “desalination units and those for purification of diesel and kerosene will be also expanded.”

On the third development phase of Abadan refinery, Daemolzekr said about 40 per cent of crude oil is currently turned into fuel oil due to ageing distillation units though reduction of fuel oil output has been put on the agenda.

He underlined that 8000 jobs will be created during five years of developing phase two of the Iranian refinery highlighting that for expansion of Abadan complex phase 4, talks are underway with a Japanese firm and a contract will be inked soon.

He referred to the held negotiations with Japan’s JGC Corporation Engineering company for carrying out the fourth development phase of Abadan Oil Refinery maintaining “the project will require nearly two billion euros of financing and it will reduce fuel oil output to less than 10 per cent.”

The official at National Iranian Oil Refining and Distribution Company (NIORDC) went on to stress that Abadan Oil Refinery began operation about 107 years ago with an initial output of 2700 barrels though its production figure has fluctuated over years.

“The refinery is currently supplying 25 per cent of the country’s gasoline demand,” noted Daemolzekr concluding “Abadan Oil Refinery is presently yielding seven million liters of Euro-4 gasoline and 100LL avgas per day.”

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Managing Director of National Iranian Oil Refining and Distribution Company (NIORDC) Abbas Kazemi, while expounding on the first major agreement between Iran and China in the post-JCPOA era, said “following months of negotiations between NIORDC and Sinopec Company, implementation of the first phase of development, optimization and improvement of production processes got on way in Abadan Refinery as the largest Iranian oil refinery complex.”

The official noted that the first phase of the refinery project requires 1.3 million dollars of monetary and financial resources asserting “the second developmental phase will be also carried out in partnership with China’s Sinopec.”

Emphasizing that the two phases of development project in Abadan Refinery would demand an aggregate total of three billion dollars of investment, he underlined that Iran enjoys 15 per cent of the share in the project while the rest of the share will be supplied by Chinese financers.

NIORDC managing director emphasized that China Export & Credit Insurance Corporation (commonly known as Sinosure) will undertake the financing of the developmental project in Abadan Refinery; “the operation primarily aims to reduce production capacity of fuel oil and boost output of high value-added products like gasoline and gas oil.”

“Not only will the fuel oil production capacity at Abadan Refinery decrease from the current 42% to lesser than 20% but also the manufacturing standard of all products will be promoted to Euro IV.”

Abbas Kazemi had previously reported on a 14-million-dollar investment in collaboration with Japan, South Korea and China to implement projects to develop and expand six oil refineries of Iran.

Almost a year ago, Abbas Kazemi announced the issuance of an ultimatum to a Chinese company on the developmental contract of Abadan Refinery.

NIORDC managing director had said due to considerable stalling for time on the part of the Chinese firm, they have received a tough ultimatum; “the Chinese side has been warned that a substitute contractor would be hired if they use any more delaying tactics.”

The capacity consolidation project in the 100-year-old Abadan Oil Refinery aims to produce products under Euro 5 standard, reduce environmental pollution, increase production of gasoline by improving production technology, reduce fuel oil production in addition to collecting obsolete tanks and installations.

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