February 20, 2017 0406 GMT
Speaking to Mehr News Agency, Abbas Kazemi said, "China's Export and Credit Insurance Corporation (SINOSURE) has opened a $1.3-billion credit line to develop and improve Abadan Oil Refinery."
The funding is part of a $3-billion deal with China Petroleum and Chemical Corporation, known as Sinopec, which has reportedly begun operations to renovate Abadan refinery, Iran's century-old refinery that was heavily damaged during the Iran-Iraq war in the 1980s.
SINOSURE is a major state-owned export credit insurance. Since its establishment in 2001, its financing has totaled $290 billion in the forms of exports and investments.
The deal calls for improving the quality of oil byproducts by upgrading the refinery's production process.
"The project is aimed at cutting mazut production and raising the output of petroleum products such as gasoline and diesel that yield higher added-value," Kazemi said.
The venture is expected to be completed in four years, with mazut output to be reduced to less than 20 percent from the current level of over 40 percent.
The NIORDC chief added that China will bankroll 85 percent of the Abadan refinery project and the remainder will be provided by domestic financers.
The government of President Hassan Rouhani has earmarked $14 billion to recondition and improve some of the biggest Iranian refineries, including those in Tehran, Tabriz and Isfahan.
It has also opened negotiations with foreign companies to overhaul Iran's aging refinery industry, since plans call for boosting crude processing capacity from 1.8 million barrels per day to more than 3 million barrels daily.
According to reports, Iran ranks 11th in the world in terms of oil processing capacity. It is the ninth producer of gasoline and 13th diesel producer. However, it tops the list of producers pumping the unwanted and environmental-unfriendly mazut.
East Asian companies have actively sought to become involved in the downstream projects in Iran's emerging petroleum industry following the lifting of international sanctions last January.
Tehran has signed seven agreements with oil and gas companies from China, Japan and South Korea on the construction or development of refineries.
Most notably, South Korea's Daelim publicized a $2-billion deal this month to develop Isfahan Oil Refinery. Japanese engineering giant JGC Corporation is also in advanced talks to upgrade the Tehran refinery, according to the NIORDC chief.