Engineering studies started for Lavan Petro-refinery construction

May 20, 2022 - 12:55

TEHRAN- Engineering studies have been started for the construction of 150,000 barrel-capacity Lavan Petro-refinery, the managing director of Lavan Oil Refining Company (LORC) announced.

Elaborating on the latest status of constructing the mentioned petro-refinery, Mohammad-Ali Akhbari said the engineering studies have been started by National Iranian Oil Engineering and Construction Company (NIOEC) and through negotiating with the banks for supplying required financial resources for the project.

He called for the help of Oil Ministry and National Iranian Oil Company (NIOC) in terms of land allocation, and said that some permits have been received, and preliminary measures have been taken in the field of providing technical knowledge for the construction of the petro-refinery and holding the tenders is being pursued.

Lavan was one of the first refining companies initiating construction of petro-refinery with the aim of completing the value chain, stable job creation, diversifying the refined products and petrochemicals in the country, the managing director further underlined.

Located in southern Iran in the Persian Gulf waters, Lavan is a small island that has now become a major point of focus for the country’s oil and gas industry.

Having an area of 78 square kilometers, the island is one of the four major terminals for the export of crude oil in Iran alongside Kharg island. The island also sits on top of the Lavan gas field, which contains over 9.5 trillion cubic feet of gas.

The development of the Lavan gas field, which was discovered in 2003, started in 2008 in the form of four projects with some $461 million of investment.

Although the island’s gas field discovery is relatively new, the industrial development of the island dates back to the late-1950s.

Lavan Oil Refining Company (LORC) was founded in 1951 under the name Lavan Distillery Complex. Having a processing capacity of 20,000 barrels per day (bpd) of crude oil, the refinery was a subsidiary of Shiraz Refinery at the time.

After the Islamic Revolution and with regard to the strategic situation and existing potential, the plans for the development and improvement of the refinery were put in place.

The importance of Lavan Refinery became more evident after the imposed war during which the damage to a number of refineries in the country, including Abadan Refinery, increased the demand for products like gas oil and gasoline significantly and this refinery became one of the major suppliers of the mentioned products to the country.

Lavan Refinery Complex was formed at this time with the aim of producing more quality products.

Currently, the refinery processes 35,000 barrels of crude that are transferred to the island through a 12-inch pipeline from the Lavan offshore company's tanks and it also refines 20,000 barrels of South Pars gas condensate which is shipped to the island.

Despite the significant development of the island’s facilities since the industrial development of the island began in the 1950s, the National Iranian Oil Company (NIOC)’s development outlook for the island has not been achieved yet.

Over the past few years, the NIOC has been following a new strategy for establishing new petro-refinery complexes across the country and Lavan Island is the home to one of the mentioned complexes.

In late January, the managing director of Lavan Refinery announced the construction of a 150,000-barrel petro-refinery next to Lavan Refinery and noted that plans were also underway for increasing the refinery's gasoline production capacity by one million liters per day.

Akhbari said the project to build the mentioned petro-refinery is in line with the oil industry’s approach for developing petro-refinery complexes across the country.

He said that major shareholders have welcomed the investment in the new petro-refinery project, negotiations have been held with the private sector, and a working group has been set up to expedite and facilitate the implementation of this project, which will be completed with continuous follow-up.

Akhbari earlier said that the refinery has used over 25,000 domestically-made equipment items in recent years which has saved the company over 8.98 trillion rials (about $31.5 million).

According to the official, in recent years, Lavan Oil Refining Company has been able to benefit from the capacities of domestic knowledge-based companies and producers by forming a domestic manufacturing committee in the company.

“Domestic producers have managed to produce over 2,200 commodity groups including about 25,000 different items for the first time at the request of Lavan Oil Refining Company,” Akhbari said.

He further announced that the refinery achieved the best performance in terms of profitability among the country’s refining companies in the first six months of the past Iranian calendar year (March 21-September 22, 2021).

Based on comparative statistics for the mentioned first six months, the company’s profits increased 225 percent compared to the same period of the preceding year, the official noted.

Akhbari also mentioned the social responsibilities of his company and said LORC has taken many steps in this regard so far, including the construction of new wharves, reconstruction of schools, reconstruction of asphalt of roads, and establishing medical clinics on the island.

MA/MA

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