New Refineries to Help End Gasoline Imports

New Refineries to Help End Gasoline ImportsNew Refineries to Help End Gasoline Imports

Gasoline import to the country will halt as soon as new gasoline refining projects go on stream in the next Iranian year (starting March 20, 2016), managing director of the National Iranian Oil Refining and Distribution Company announced on Sunday.

"Currently most of the country's need is met domestically. To be more precise, of the 70.5 million liters of gasoline consumed daily in the country, 62.5 million liters are produced by domestic refineries," Abbas Kazemi was also quoted as saying by IRNA.

"NIORDC has imported 8 million liters of gasoline per day since the beginning of the current Iranian year to satisfy the ever-increasing need for the strategic commodity."

The official noted that plans have been made not only to become self-reliant in gasoline production, but also to have a say in international markets as an exporter.

"Domestic Euro-4 gasoline production stands at 24 million liters per day, which will reach 29 ml/d by March. Moreover, the output will surpass 35 ml/d by June, which is half as much as the country's demand," he said.

"The Oil Ministry has set an agenda to launch five new Euro-4 gasoline and diesel production plants. Iran has imported 2.7 billion liters of gasoline since March 21, 2015, indicating a 1-billion-liter rise compared with the corresponding period of last year."

Kazemi said the first phase of Persian Gulf Star Refinery's Euro-4 gasoline complex is expected to become operational in the near future with a production capacity of 12 million liters per day and put an end to gasoline import. He noted that the completion of the project by Tamin Oil, Gas and Petrochemical Investment Company has been delayed many times due to financial constraints.

"The loss in profit due to its launch is estimated at $3 billion to $4 billion. The refinery’s annual revenues would amount to $10 billion had it become operational when oil prices were around $100 per barrel. But the refinery is now expected to engender much less in revenues as oil prices have suffered drastic decline," he said.

The refinery is projected to produce 360,000 barrels of gas condensate, 27 million liters of regular gasoline, 9 million liters of super gasoline, 14 million liters of diesel and 370,000 liters of jet fuel per day once fully operational. The daily production of 3.8 million liters of liquefied gas, 130,000 tons of sulfur and 468 tons of hydrogen is also among the refinery’s objectives.

According to the NIORDC chief, Isfahan Refinery's development plan is of great importance and as soon as it becomes operational, a large number of cities and towns located in the vicinity of this province will be provided by Euro-4 gasoline.

"Bandar Abbas Oil Refinery Company's quality improvement plan has made 96% progress and its output is predicted to increase by 3 million liters per day by May 2016," he said, adding that the Oil Ministry has taken effective measures to reduce the distribution of low-quality gasoline and increase the supply of Euro-4 gasoline.

Highlighting the implementation of Lavan refinery's quality improvement and capacity optimization plan, Kazemi said the refinery is waiting to receive the much-needed catalysts.

"Unlike last year when oil byproducts' import and export balance was negative, we managed to export diesel and liquefied gas sustainably all year round," he said.

"Iranian researchers have succeeded in manufacturing 25 catalysts, including the catalyst used in the production of Euro-4 gasoline. With the aim of producing Euro-4 gasoline in Shiraz refinery, the isomerization unit has begun partial operations and will be completed with an investment of $55 million."

Kazemi noted that the refining industry's profit margin is low in the world because of which refiners must adapt themselves to market volatility.

Iran's mazut production stands at 26% whereas Europeans have reduced it to as low as 2%. As long as refineries' shareholders do not make strategic plans to convert mazut to higher value-added products such as gasoline or diesel, they will have to continue their business with the lowest profitability ratios.

Kazemi believes that in order to complete refinery development plans, NIORDC needs investment worth $13 billion.