The Shazand Oil Refinery, one of Iran’s key refineries, was built and commissioned in two phases after the Islamic Revolution. The facility produces five main products—gasoline, kerosene, fuel oil, liquefied petroleum gas (LPG) and jet fuel—as well as special products such as sulfur, propylene, premium kerosene and other petrochemical derivatives.

All gasoline and diesel produced at the refinery are delivered directly to the government, while specialty products are sold through domestic or export exchanges. The refinery currently produces 16 million liters of gasoline, 12 million liters of diesel, 2,000 tons of LPG, 500 tons of propylene and 500 tons of sulfur daily.

Shazand is among the few Iranian refineries that have advanced their quality improvement projects during their second phase. As a result, it produces Euro-4 and regular gasoline under government directives and has the capacity to produce Euro-5 gasoline. All of its diesel fuel meets Euro-5 standards as well.

In an interview with Shana, Reza Cheraghi, the refinery’s managing director, outlined its latest achievements and ongoing projects.

 Refinery quality upgrade projects

Cheraghi said Shazand’s quality improvement initiatives are progressing through several stages. One of the key efforts is the needle coke project, which is mandated under Article 45 of Iran’s Seventh Development Plan. “Design and preliminary steps have been completed, and we are now finalizing the environmental permit. Once the license is granted, execution will begin,” he said.

 Ongoing infrastructure projects

Cheraghi said a number of projects are underway to strengthen the refinery’s infrastructure, including wastewater collection and hybrid cooling systems to secure the plant’s water supply. Contractors are actively progressing on these projects. Other initiatives include gas flare recovery systems to reduce emissions and improve energy efficiency, additional loading platforms and storage tanks, and the implementation of a metering system—all aligned with the needle coke project.

 Capacity expansion to meet rising fuel demand

“With the refinery’s feedstock capacity now increased to 265,000 barrels per day, we can produce over 16 million liters of gasoline daily,” Cheraghi said. “Under special circumstances such as crises or wartime conditions, production can even exceed this figure.”

He cited the recent 12-day fuel supply crisis as an example when Shazand maintained uninterrupted output above 16 million liters per day. “Despite the pressure, we continued fuel supply nationwide without shortages,” he said, adding that once the needle coke unit becomes operational, gasoline output will rise further.

 Key challenges facing the refinery

Cheraghi pointed to several industrywide challenges, including delays in customs clearance, foreign exchange allocation, the import of catalysts and equipment, and government-imposed price controls on feedstock for private refineries.

“To address customs delays and currency allocation issues, we decided to use the refinery’s own foreign exchange resources for some imports,” he said. “For the first time, Shazand managed to provide foreign currency independently from outside Iran.”

He added that the Refiners’ Association is currently negotiating with the Oil Ministry to resolve pricing and feedstock valuation issues.

 Domestic sourcing of equipment, materials

According to Cheraghi, about 90% of the refinery’s required parts and equipment are now sourced domestically. “Virtually all operational components used in refining are made in Iran,” he said. For catalysts—considered highly specialized materials—about half are supplied domestically and the rest imported.

“This local capacity has allowed Shazand to overcome many sanctions-related obstacles,” he said. “However, we still face difficulties in raw material imports, currency allocation, and customs regulations that require further attention.”

 Overhaul after a decade

Cheraghi said the refinery recently underwent its most extensive overhaul in nearly a decade. “It had been eight to 10 years since such major maintenance was carried out,” he said. “The FCC unit—the most complex gasoline production unit in the Middle East—was overhauled after 10 years, along with 13 other units.”

So far, maintenance has been completed on 12 units, and the FCC unit will return to operation within days. “During this overhaul, about 10,000 workers were engaged daily for three months,” he said.

As a result of the upgrades, sulfur and catalyst losses were significantly reduced. “Previously, we were losing about 18 tons of catalyst per day from the FCC unit. After the overhaul, this dropped to about 8–10 tons,” Cheraghi added.

 Water supply solutions amid national shortages

Water scarcity remains a major challenge for Iranian refineries. “Although our current supply is stable, future shortages are inevitable,” Cheraghi said. To prepare, Shazand is developing wastewater recovery and hybrid cooling projects to secure long-term water sustainability and minimize consumption.

Plans are also underway to capture and reuse excess gases, reducing environmental impact.

 Investment, future outlook

Shazand’s future focus, Cheraghi said, is on quality improvement and production expansion projects with an estimated investment of 300 million euros. “We are moving forward with new projects to boost gasoline and fuel output,” he said. “The needle coke project is one of our major upcoming initiatives, which will enhance both fuel quality and gasoline capacity.”

 Commitment to social responsibility

The refinery also prioritizes social responsibility projects in its surrounding region. These include developing educational infrastructure and technical training programs, with a budget of 20 trillion rials (about 200 billion tomans) allocated for 2024.

Cheraghi said additional projects are planned to expand storage capacity and refining units in response to growing national fuel demand. “Our goal is to enhance production capacity while meeting environmental and quality standards,” he said.

“In the long term, we aim to operate a refinery that meets the highest global benchmarks in clean fuel production and environmental performance.”

 Final remarks

Cheraghi expressed appreciation to refinery employees and the National Iranian Oil Products Distribution Co. “Without their continuous efforts, none of these projects could have been realized,” he said. “At Shazand, our mission is to produce top-quality fuel and contribute reliably to the country’s energy supply. With the new projects and capacity increases, we hope to play an even greater role in Iran’s industrial development.”