Iran Oil Refining Capacity to Increase 1.5 Times in 5 Years

EghtesadOnline: Raising the quality and output of oil refineries and building new refineries are on the agenda of the Oil Ministry to help increase Iran's oil refining capacity by 1.5 times in five years, the new oil minister said.

News ID: ۷۸۷۰۰۴

12 September 2021

“Development programs are underway to bring the country’s refining capacity, including crude oil and gas condensate, to 3.5 million barrels per day from the current 2.2 mb/d,” Javad Owji was also quoted as saying by the Oil Ministry’s news agency Shana.

"Investors have been identified for generating and developing refining capacity, and they have signed agreements with the Oil Ministry in this regard,” he added.

The minister made the remarks during a visit to Tehran Oil Refinery, one of the oldest refining facilities in the country, on Friday.

The refinery is located 15 kilometers south of the capital. With a nominal crude refining capacity of 250,000 barrels per day, it produces 7 million liters of unleaded gasoline with octane ratings of 87 (regular) per day. The company’s daily diesel output is 8 million liters.

“The refinery accounts for about 13.5% of the country’s refining capacity,” Owji noted.

Commenting on gas production and consumption during winter, the minister said, “Gas consumption in the domestic, industrial and power sectors is expected to rise by 10% in the cold season compared to last year. However, since the amount of gas production has not changed, we expect a deficit of 200 million cubic meters of gas per day in winter.”

Consumption in household and commercial sectors accounts for 70% of the total output and close to 260 mcm/d of gas are delivered to power stations and petrochemical plants.

Gas output capacity currently stands at 1 billion cubic meters per day, which is similar to that of last Iranian year (March 2020-21), but it is expected to increase by 10% by the end of the current fiscal year (March 2022) and reach 1.1 bcm.

In order to prevent problems in different sectors, plans have been devised to compensate the gas shortage by supplying liquid fuel, he added.

Regarding gas diplomacy, Owji said, "One of the issues we are pursuing is the issue of gas diplomacy with neighboring countries, including Turkmenistan. We will do our best to increase the current 2% share of Iran's gas trade. We will also hold talks with Turkmenistan, Iraq and other neighboring countries to increase gas exports and trade.”

Iran generally exports close to 75 million cubic meters of natural gas per day to neighboring states, namely Iraq and Turkey, although the exports have declined this summer due to the rise in domestic consumption.

Armenia and Azerbaijan also buy gas via swap deals.