National Iranian Oil Refining and Distribution Company’s (NIOC) CEO, Abbas Kazemi, said that China has opened a line of credit, worth $1.3b, to finance the development of Abadan Oil Refinery, Iran’s oldest refinery in the southern Khuzestan Province, Oil&Gas 360 reported.
The funding is part of a $3b deal with China Petroleum and Chemical Corporation, known as Sinopec, which has reportedly started operations on renovating the Abadan refinery, Iran’s century-old refinery that was heavily damaged during the Iran-Iraq war in the 1980s, according to Financial Tribune. The deal calls for improving the quality of oil byproducts by upgrading the refinery’s production process.
Kazemi added: “The project is aimed at cutting mazut production and raising the output of petroleum products such as gasoline and diesel that yield higher added-value.” As The venture is expected to be completed in four years, with mazut output to be reduced to less than 20% from over 40% at present. The NIORDC chief added that China will bankroll 85% of the Abadan refinery project and the remainder will be provided by domestic financiers.
The Irani government has earmarked $14b to recondition and improve some of the biggest Iranian refineries, including in Tehran, Tabriz and Isfahan. It has also opened negotiations with foreign companies to overhaul Iran’s aging refinery industry, as plans call for boosting the country’s crude processing capacity from 1.8mb/d to more than 3mb/d.