Lavan Oil Refining Company was established in 1976 under the name Lavan Distillation Complex, operating under the Shiraz Refinery with a capacity of 2,000 barrels of crude oil per day. It was built by the Yugoslav company Ingra, with oversight from the National Iranian Oil Company. After the Islamic Revolution, and given its strategic location and potential capabilities, Lavan Refinery aimed to produce higher-quality products.

In 1989, the Merax unit, with a capacity of 6,000 barrels per day, was designed by U.O.P. and installed and commissioned by Chyoda for the production of sweet naphtha. In 1994, with the implementation of a project to increase the capacity of the crude oil distillation unit, the installation of a kerosene recirculation pump system increased the capacity of the crude oil distillation unit from 20,000 barrels to 30,000 barrels per day. This enhancement allowed for increased production of valuable kerosene products and reduced waste.