Akhbari said regarding market conditions and the fact that fuel oil is of no value and also regarding the policy to cut production of the product for environmental reasons, the LORC moved towards production of valuable products, following privatization of the refinery, lack of liquidity and loss experience.
Since the beginning of the current fiscal year of 1395 (started on March 20), the refinery changed its feedstock to gas condensates and lessening fuel oil production whose value is equal to that of sour heavy naphtha, the raw material for production of gasoline and oil gas.
"Also, we managed to cut fuel oil production rate to 16.7 percent from 24 percent in the years 1393 (2014-15) and 1394 (2015-16)," the official said, putting fuel oil production in the first six months (March 20-September 20) last year at about 385,000 tons, which has reached 285,000 tons in the same period this year.
Akhbari said, "To cut fuel oil production, LORC follows two more projects: Distillation in Vacuum and Bitumen Manufacturing Unit. The project for designing and consultation has been entrusted to the contractor and early studies to that effect are over."
"Once the two projects are implemented, fuel oil will be converted to bitumen and gasoil and practically, fuel oil production will be fully over and will be replaced by valuable products."
The official said the project is estimated to cost 30 million dollars, taking two years to be implemented. The new units are to be set up by Iranian engineers and the expertise of the refinery, he added.
Managing Director of LORC referred to the high interest of Iranian and foreign investors to implement the project and said the projects will be implemented on banking facilities, believing the capital return will be swift and within a year.
LORC was established in 1976 under the title of Lavan Distillation Facility, running under supervision of Shiraz Refinery. It was built and put into operation by former Yugoslavian Ingra Co. under supervision of National Iranian Oil Company (NIOC) to produce 2000 barrels of crude oil a day.
The refining facility underwent great changes after long years of activity and was put into operation in May 2011 on the National Persian Gulf Day. Its capacity rose to 55,000 barrels per day from 30,000 barrels per day.
The refinery now receives 35,000 barrels of crude oil as feedstock, piped by 12-inch pipeline, and also 20,000 barrels of gas condensates sent from South Pars.
