In line with efforts to complete the construction of Iran's largest oil refinery in the southern city of Bandar Abbas, Hormozgan Province, the venture will receive fresh impetus as $120 million are expected to be injected into the project by the end of March.
Ali Dadvar, managing director of Persian Gulf Star Refinery, noted that the government has approved a loan worth €260 million ($311 million) from the sovereign wealth fund, the National Development Fund of Iran, to complete the remaining phases of the refinery, Mehr News Agency reported on Friday.
"The refinery will receive $50 million of the allocated fund in the next few days and the rest will be obtained in less than a month," he added.
According to the official, developers of the plan are not interested in asking for more loans, that is why they have decided to cover a proportion of the costs by selling the plant's products.
"The refinery's second phase output stands at 90,000 barrels per day, though it can reach 120,000 bpd," Dadvar said.
Persian Gulf Star Refinery is being developed in three phases with a combined processing capacity of 360,000 barrels per day of condensate, a type of ultra light crude extracted from the giant South Pars Gas Field in the Persian Gulf.
Once fully operational, the refinery will produce 36 million liters of high-octane gasoline as part of efforts to wean Iran from the import of the fuel product.
Currently, one phase of PGSR is operational but production is reportedly below the designated capacity of 12 million liters a day. Pointing to the complex's other products, Dadvar said, "The plant has started to produce diesel, naphtha and liquefied gas."
According to the official, close to 6.5 million barrels of Euro-5 diesel will be exported to international markets next week. "The second phase's production can be stabilized if $50 million are invested in it," Dadvar said, adding that the much-needed equipment have been purchased and imported from Spain and Italy without any difficulty.
"Unlike other refineries, which import their catalysts from India and China, PGSR's catalysts are manufactured domestically."
The official noted that there will be no need to import gasoline as of March, because both the production and strategic storage condition of gasoline are ideal. PGSR is owned by Tamin Petroleum and Petrochemical Investment Company (49%), Oil Industry Pension Fund Investment Company (33.1%) and National Iranian Oil Refining and Distribution Company (17.9%).
"Different options are on the table for financing and developing the second and third phases of the Persian Gulf Star Refinery, including a tender that may include foreign companies," said Eslam Khosravi, a member of the board of Tamin group, in September.
Khosravi left the door open for an arrangement similar to that of French oil and gas company Total with Tehran to develop a major offshore gas venture.
"Another alternative is [direct] negotiation with foreign investors" outside the tendering process, he said.
Iranian plants produce nearly 60 million liters of gasoline daily, but the country has to import 15-20 million liters per day to meet domestic demand.
Reportedly, PGSR and the nearby Bandar Abbas Oil Refinery, both a few kilometers off the Persian Gulf coast, account for half of Iran's gasoline output.
