Persian Gulf Star Refinery, Iran's Major Step for Self-Reliance in Gasoline Production

President Hassan Rouhani on Sunday officially launched Phase 1 of the Persian Gulf Star Refinery in the city of Bandar Abbas in southern Hormozgan Province which is hailed as the Middle East's largest processing facility for gas condensate.

Construction of the refinery started in 2006, but the project was stymied by mismanagement as well as financial constraints due to international economic curbs imposed over Tehran's nuclear program.

The launch of the first phase of PGSR means the refinery is now operating at one-third of its total crude oil processing capacity of 360,000 barrels per day.

Once in full swing, the star refinery will produce 36 ml/d of gasoline, which will effectively cut gasoline imports and turn Iran into an exporter of the product.

Rouhani said the easing of trade and financial curbs under the nuclear accord with world powers breathed a new life in the Star refinery project which had been left in a state of limbo.

Update:

"The refinery's equipment was held up in other countries (due to the sanctions) and had it not been for the nuclear deal, the refinery couldn’t be launched today. Those who say they can't see the fruit of the nuclear deal should come and see that the Persian Gulf Star Refinery's equipment and machinery has been purchased and installed," said the president.

He was accompanied by Oil Minister Bijan Namdar Zanganeh and General Ebadollah Abdollahi, head of Khatam-al-Anbiya Construction Headquarters, an affiliate of the Islamic Revolutionary Guard Corps and the refinery's contractor.

After years of arduous negotiations, Tehran and world powers (the five permanent members of the UN Security Council plus Germany) struck a landmark deal in 2015 on removing some economic curbs against Iran in exchange for limiting the country's nuclear activities. The deal, officially known as the Joint Comprehensive Plan of Action, came into force in January 2016.

The launch of the first PGSR development phase means the refinery is now operating at one-third of its oil processing capacity of 360,000 barrels per day. It is some 20 kilometers west of Bandar Abbas and 12 kilometers north of the Persian Gulf coast.

In the first development phase, 12 million liters per day of Euro-4 grade gasoline, 4.5 ml/d of Euro-4 diesel, 1 ml/d of kerosene and 300,000 liters per day of liquefied petroleum gas will be produced at the sprawling complex.

"The commissioning of Persian Gulf Star Refinery's first phase puts Iran on track for self-reliance in gasoline production and its export in the near future," Rouhani noted, adding that $1.4 billion was invested in the refinery over the last four years.

Iran Gasoline Production Capacity

Once in full swing, the star refinery will produce 36 ml/d of gasoline, which will effectively cut gasoline imports and transform Iran into an exporter of the product. In the previous fiscal, Iranians burned almost 74 million liters of gasoline daily. The government had to import 12 ml/d to meet demand.

"Before the JCPOA, if we imported equipment and it happened to be defective, that was our own problem. But today, they (foreign manufacturing companies) oversee the equipment."

The refinery's two remaining development phases are scheduled to be completed by the end of the current fiscal in March 2018.

Rouhani's tenure ends in summer. He is running for a second and last term on his 2013 platform of economic development, hope, moderation and normal ties to the outside world. Speaking in the port city, the president denied claims (by his political opponents) that the inauguration of the PGSR and other high-profile industrial projects ahead of the May 19 presidential election are publicity stunts.

"Some people ask why we have commissioned projects in the past few weeks. It is not like flipping the switch of a light bulb. The inaugurations come on the back of four years of investment and development," he said.