Refinery to Make Iran a Petrol Exporter
Oil products, particularly gasoline, are among largely consumed strategic products in Iran. Despite fuel rationing plan and gasoline price hikes, the consumption of this energy carrier has not declined and has even grown in recent years.
Self-sufficiency in gasoline production has long been on the agenda of the Iranian government. To that effect, Iran has invested $9 billion in old and new oil refineries in order to increase their gasoline production and reduce their sulfur output. Refining projects worth $14 billion have been worked out in recent years, $9 billion of which has already been realized leading to a 1,500-ton cut in sulfur production.
Isfahan, Lavan, Tabriz and Bandar Abbas are among old refineries in Iran. In recent years, they have conducted quality improvement projects in order to boost their petroleum products, particularly gasoline, production. Pars, Anahita and Persian Gulf Star are new refinery projects in Iran. Among them, Persian Gulf Star is very important because it would bring an end to Iran’s gasoline imports and make Iran an exporter of this energy commodity. Completion of Persian Gulf Star Refinery has become a top priority for Iran’s Ministry of Petroleum. If this national project is not implemented, Iran will be exposed to the threat of gasoline embargo and concomitant economic and social pressures.
Operation of Persian Gulf Star Refinery will increase Iran’s gasoline production by 35 million liters a day and its gasoil production by 14 ml/d.
During New Year public holidays in March, Iranians consume at most 70 ml/d; therefore, the startup of Persian Gulf Star Refinery will definitely promote Iran to the status of a gasoline exporter. Persian Gulf Star Refinery will be also producing 1.3 ml/d of heating gasoil, 2 ml/d of liquefied petroleum gas, 3 ml/d of jet fuel and 130 tons a day of sulfur.
Less than a month ago, Iran’s First Vice President Es’haq Jahangiri and Minister of Petroleum Bijan Namdar Zangeneh visited the refinery project and ordered the acceleration of efforts for the project to come on-stream as soon as possible.
The refinery is located in a good position. The advantages of this facility include access to the giant offshore South Pars gas field, proximity to sea and easy transfer of products.
When it was first decided for the refinery to be built on 340 ha of land, two LCs were opened and its stocks were divided between Indonesia’s Star Petrogas, Oil Industry Pension Fund, National Iranian Oil Refining and Distribution Company and Persian Gulf Star Oil Company. But later on, the Indonesian company transferred 34% of its shares to Social Security Organization and it held only 15%.
This refinery is expected to process 360,000 b/d of gas condensate supplied by nine phases of South Pars gas field to produce light oil products. So far, 3.8 billion Euros has been invested in this project which still needs 650 million Euros. National Development Fund of Iran (NDFI) has agreed to provide this sum.
80% Progress
The refinery project is 82% completed and the first phase of the project is expected to become operational later this year.
Gas condensate is a low-density mixture of hydrocarbon liquids that are present as gaseous components in the raw natural gas produced from many natural gas fields. It condenses out of the raw gas if the temperature is reduced to below the hydrocarbon dew point temperature of the raw gas.
The natural gas condensate is also referred to as simply condensate, or gas condensate, or sometimes natural gasoline because it contains hydrocarbons within the gasoline boiling range.
Condensate is often considered as a byproduct in natural gas recovery operations, but it is even more valuable than crude oil.
According to technical surveys, nearly 60% of gas condensates are transformed into naphtha and 30% into gasoil after processing. Based on the current price of gas condensate, gasoil and gasoline, the estimated margins from processing of each barrel of gas condensate is around $20, or fourth time the margin of refineries fed with crude oil.
Gas condensate is a very valuable feedstock for refineries running with unsophisticated technologies.
Iran has been facing sanctions over the past three decades. Over these years, Iranian officials have tried their best to cut Iran’s dependence on oil. Last calendar year to March 2014, Iran decided to cut gas condensate exports so that this product would be processed in the country. By virtue of Iran’s general economic policies, moving towards completion of the value chain of oil and gas and exporting products instead of raw materials would be instrumental in enhancing the country’s revenue and strengthening the country against the impacts of fluctuations in oil and gas prices. Therefore, it is necessary for the value chain of oil and gas condensates to be completed through boosting the capacity of oil refineries. To that effect, Iran’s Ministry of Petroleum intends to totally stop exporting gas condensate in four years. Development of the country’s refining capacity, with priority given to gas condensate, could earn Iran billions of dollars in revenue.
To that end, Persian Gulf Star Refinery with the capacity of 360,000 b/d, Pars refinery with the capacity of 120,000 b/d, eight 60,000-b/d refineries known as Siraf Refining Park and a number of mini-refineries with capacities below 20,000 b/d are expected to come online and be fed with gas condensate.