Located in the southwestern city of Abadan, the refinery will process 360,000 barrels/day of crude oil after the project is complete.
Iranian Minister of Petroleum Bijan Zangeneh, attending a ceremony to break grounds for the project, said by the time the project reaches fruition, the refinery will become a profitable facility with a daily refining capacity of 360,000 barrels.
The ceremony was held to start construction of a 210,000 b/d unit at the refinery that will be build by China’s Sinopec.
The plant is now processing 150,000 b/d of crude oil.
For the time being the items supplied by the refinery are not valued much; 40% of the crude oil processed by the facility is turned into fuel oil which is priced less than crude oil.
The refinery registers a yearly loss of $600 to $700 million dollars.
Sinopec has signed a $2.7b deal with an Iranian company for developing the first phase of the project by building a 210,000 b/d refinery unit at the refinery.
Production of Euro-5 petrol, reduction of environmentally harmful emissions, raising production of gasoil and gasoline, reduction of fuel oil production of the refinery, and renovation of worn-out units of the facility are the top objectives of the project.
Abadan Refinery was constructed nearly a century ago with a nameplate capacity of 400,000 b/d but 250,000 b/b of its capacity is supplied by three distillation units with over 70 years of age.