Refinery Projects Unfazed by Sanctions
Until several years ago, US presidents did not cease to speak about imposing sanctions on Iran’s petroleum products, turning it into an Achilles’ heel of the country. However, with the development of existing refineries and completion of the largest gas condensate facility in the region and the world under the 11th and 12th administrations, the country has become self-sufficient in gasoline and gasoil production. Furthermore, Iran is exporting fuel to its neighbors.
In the light of existing restrictions on selling crude oil, Iran is planning to increase its crude oil and gas condensate refining capacity to about 2.4 mb/d by the end of the current calendar year. The figure has already reached 2.15 mb/d.
Thanks to the planning made in the country, 850,000 b/d of crude oil and condensate that might have been blocked from entering the world markets due to the US sanctions has been refined and converted into valuable products.
Gas condensate delivery to refineries is to increase from 450,000 b/d to 500,000 b/d and crude oil delivery from 1.7 mb/d to 1.9 mb/d.
This policy is a strategy adopted by Iran’s Petroleum Ministry in the face of an economic war launched by the US against Iran.
Despite implementation of development projects in recent years at Iranian refineries, the private sector is suffering big losses due to the outdated technology and decrepit structure of oil refining facilities.
Oil refineries are currently receiving crude oil at a 5% discount, but they are not gaining any big profit. Reconstruction and renovation of these refineries would need investment and state-of-the-art technology. In case the refineries are not rebuilt, Iran will lag behind the world, and it would become more difficult for the country to compensate for this loss. The private sector is not much interested in renovation and optimization. Therefore, the government is granting loans and guaranteeing foreign investment in order to help the private sector renovate oil refineries. After Iran struck the 2015 nuclear deal with the six world powers; South Korean and Japanese companies expressed their willingness to renovate Iranian refineries, but the US’s unilateral withdrawal from the nuclear deal and subsequent restoration of sanctions against Iran’s oil sector led foreign firms to pull out of Iran.
Iranian oil refineries produce big volumes of fuel oil due to their outdated technology and decrepit equipment. Therefore, reducing fuel oil production at Iranian refineries topped the agenda. This issue has been taken into consideration with a research-oriented view to acquiring modern technologies and building new refineries. The Persian Gulf Star refinery and the Siraf refining facilities are cases in point.
In light of the approach to use heavy and ultra-heavy oil resources in refining facilities, and given the significance of acceding the latest technology, numerous measures like setting up research institutes in partnership with the Ministry of Science, Research and Technology is under way at the Directorate of Research and Technology. The most important research conducted so far is as follows: setting up a research institute for upgrading the quality of heavy crude oil and its residues including residue fluid catalytic cracking (RFCC), delayed coking unit (DCU), residual crude hydrotreating (RCD), setting up a research institute for naphtha middle distillate desulfurization with a view to developing technical savvy for the process and catalyst (HDS), establishing a research institute for the catalytic conversion of naphtha (CCR) to develop technical savvy, setting up an isomerization research institute to develop technical savvy for processing and catalyst and setting up a hydrocracking research institute to develop technical knowhow for the process and catalyst.
The 5th Five-Year Economic Development Plan allocates one percent of budget allocation to National Iranian Oil Refining and Distribution Company (NIORDC)’s investment projects for upgrading technology and reducing energy intensity.
The natural gas produced at the South Pars gas field in the Persian Gulf constitutes a high share in the country’s fuel mix. Enhanced production would naturally continue. Therefore, the policy of feeding the Persian Gulf Star refinery with gas condensate has been on the agenda in recent years and the field keeps producing.
Last February, two key refining projects came online: Phase III of the Persian Gulf gas condensate refinery and Bandar Abbas oil refinery qualitative and quantitative upgrading. The Persian Gulf Star refinery is now producing 45 ml/d of Euro-5 gasoline, thereby supplying 50% of national gasoline consumption. Furthermore, the facility is producing 12 ml/d of gasoil and kerosene, as well as 3 ml/d of liquefied petroleum gas (LPG). That has made Iran a potential exporter of gasoline.
Compared with other refineries, the Persian Gulf Star refinery is supplying products that are more environmentally friendly. The aromatic contents including benzene are in compliance with standard. Issa Kalantari, head of the Department of the Environment, has said that the Persian Gulf Star refinery is fitted with a technology helping remove environmental pollution. The products that include gasoline with an octane number of above 91 and below 1% benzene content are more environmentally friendly. In fact, it may be argued that supply of valuable products at the refinery would encourage car manufacturers to produce cars with better quality. Once required equipment has been installed, the condensate refining capacity of the Persian Gulf Star refinery would reach 480,000 b/d.
17ml/d Gasoline at Shazand
The Persian Gulf Star refinery is followed by the Imam Khomeini refinery with an output of 17 ml/d of gasoline and 11 ml/d of gasoil. The facility was developed to increase its nominal capacity from the current 169,000 b/d to 250,000 b/d, and to increase its gasoline production capacity from 4.6 ml/d to 17 ml/d. In the meantime, its fuel oil share will decline and refined products would be desulfurized.
Another key facility in Iran is the Bandar Abbas oil refinery with an output of 15 ml/d of gasoil and 12 ml/d of gasoline. The objective behind the quality upgrade of refined products at this refinery was to improve the quality of products to meet environmental objectives and to reduce the sulfur content of gasoil to comply with the euro-5 grade. This objective was achieved after the installation of isomerization units and diesel refining facilities. Energy management, cutting fuel consumption and the low API of crude oil were among important factors to be included in this project. Adding 5 ml/d to the refinery’s output, as well as upgrading the quality of gasoline to euro-5 standards has been materialized.
Euro-Grade Gasoil at Isfahan Refinery
The project for process development, upgrading the quality of products and optimizing Isfahan refinery with a view to increasing the gasoline output from 41,000 b/d to 120,000 b/d, as well as upgrading the quality of products to Euro-standard levels has been approved. To that effect, high-octane gasoline and Euro-5 grade diesel fuel was produced. Gasoline production units and associated sections have been completed. After launching the gasoil hydrotreating facility of this refinery, which is currently more than 90% complete, the Euro-grade gasoil production level from this refinery would reach 20 ml/d. Isfahan refinery is currently producing 12 ml/d of gasoil, playing a key role in production and supply of high-quality fuel.
Tabriz refinery development project came online in August 2019. The facility is now distributing 3 ml/d of high quality gasoline in northern and northwestern areas of the country. The gasoil desulfurization unit of the Tabriz oil refinery came online on a pilot basis in September 2018. With the completion of the production process, Iran’s Euro-5 gasoil production capacity will grow 6 ml/d. The project for the optimization and quality upgrade of Tabriz refinery products including designing and installing the naphtha reforming and installing the gasoil refining section to reduce the sulfur content of gasoil meet Euro-5 standards.
The project is aimed at boosting the quantity and quality of gasoline, and facilitating the production of premium gasoline in compliance with Euro-5 standards, removing MTBE from gasoline, supplying 750 b/d of gasoline to the Tabriz petrochemical plant and producing Euro-5 diesel fuel.
High Quality Gasoil at Tehran Refinery
High quality gasoline and gasoil production at Tehran’s oil refinery officially started in August 2012.The facility is currently producing 7 ml/d of gasoline and 12 ml/d of gasoil up to Euro standards in Tehran. The main idea behind this project is to upgrade the quality of refined products of the Tehran refinery, upgrade the quality of products in line with environmental objectives and reduce the sulfur content of gasoil and kerosene in compliance with Euro-5 standards.
Euro-Grade Gasoline in Lavan
The first cargo of Euro-5 gasoline produced by the Lavan refinery was loaded for delivery to Bandar Abbas. The 8,000-liter cargo is indicative of the refinery’s contribution to quality products. The first phase of optimization project at this refinery came online in 2011 in order to increase capacity from 30,000 b/d to 55,000 b/d. The light naphtha isomerization and hydrotreating unit of this refinery became operational in 2013.
The hydrotreating unit of middle distillate products – kerosene and gasoil – came online in 2015. Two years later, the gasoil and gasoline desulfurization unit became operational.
Kermanshah; Polisher Installed
The Kermanshah oil refining company installed a polisher unit last February. This section is needed to refine the returned gas condensate, which always poses a serious risk to refineries. The polisher package was purchased from a British company some 13 years ago. Despite all restrictions, it was installed by the refinery technicians.
Due to the lack of sufficient data and relevant instructions, experts at the technical and engineering services removed the problems and managed to launch the unit solely with water. In the next stage, acid had to be injected.
Condensate polishers are important systems using the boiling and condensing of water to transport or transform thermal energy. Using technology similar to a water softener, trace amounts of minerals, or removes other contaminants from the system before such contamination becomes concentrated enough to cause problems by depositing minerals inside pipes, or within precision-engineered devices such as boilers, steam generators, heat exchangers, steam turbines, cooling towers, and condensers.
The removal of minerals has the secondary effect of maintaining the PH balance of the water at or near neutral by removing ions that would tend to make the water more acidic. This reduces the rate of corrosion where water comes in contact with metal.
Condensate polishing typically involves ion exchange technology for the removal of trace dissolved minerals and suspended matter. Commonly used as part of a power plant’s condensate system, it prevents premature chemical failure and deposition within the power cycle which would have resulted in loss of unit efficiency and possible mechanical damage to key generating equipment.
The Shazand refinery in Arak is procuring 17 ml/d of gasoline, the Isfahan refinery 12 ml/d, the Tabriz refinery 3 ml/d, the Bandar Abbas refinery 12 ml/d, and the Persian Gulf Star refinery 45 ml/d. It totals 90 ml/d of clean fuel.
One of the major projects envisaged for early next calendar year is development of the Isfahan oil refinery. Operation of its gasoil hydrotreating unit would allow for the production of more than 20 ml/d of Euro-grade gasoil (sulfur content below 50 ppm). In total, more than 70 ml/d of Euro-grade in the country, this would be a great achievement for the Iran’s Petroleum Ministry.
Courtesy of Iran Petroleum