Work on phase two of upgrading the Abadan Refinery – one of Iran’s oldest – has reached seven to eight per cent complete, with the project seeking financial closure, according to sources close to the project.

“Sinopec is involved in phase two of the project. The last phase is engineering and design. The progress of this project is about 7 or 8 per cent. FEED [Front-End Engineering and Design] stage is finished and we’re waiting for the source of finance for this project,” said a source close to the scheme.

“They have had to review FEED because of some changes,” he added.

The 105-year old Abadan Refinery was one of the largest refineries in the world when it was built by the Anglo-Persian Oil Company, the forerunner to British Petroleum (BP). Its nationalisation by the democratically-elected government of Prime Minister Mohammad Mossadegh led to his overthrow and the reinstallation of the last Shah by the UK and US.

The refinery complex suffered extensive damage during the nearly decade-long Iran-Iraq war of the eighties, and was earmarked for renovation following the lift of nuclear-related sanctions over Iran in 2015.

The Islamic Republic is seeking almost $15bn in renovating some of its ageing refineries at Tehran, Abadan, Bandar Abbas, Tabriz and Isfahan to produce low-sulphur gasoline in compliance with International Maritime Organisation’s latest guidelines.

The state-backed National Iranian Oil Refining and Distribution Company is aiming to reach financial closure for the projects by end of the year.