Business | Oil & Gas
Iran poised to export gasoline from 2012
Iran's econ-omically and politically costly gasoline imports should end in 2012 when refinery upgrades will make the nation an exporter of the motor fuel, an energy consultant said.
- Reuters
- Published: 01:00 April 11, 2008
Dubai: Iran's econ-omically and politically costly gasoline imports should end in 2012 when refinery upgrades will make the nation an exporter of the motor fuel, an energy consultant said.
Iran is the world's fourth-largest crude oil producer, but lacks the refining capacity for domestic needs, forcing it to import large amounts of gasoline and burdening its finances.
The imports also make Iran vulnerable to pressure over its nuclear programme.
"Iran will certainly be a sizeable gasoline exporter post-2012," Fereidun Fesharaki, chief executive of FACTS Global Energy, said on the sidelines of an energy conference this week.
"The government has gone past the point of no return on this."
Domestic and international political pressures rather than economic motivation had played a key role in Iran's decision to boost refinery capacity, Fesharaki said.
Embarrassment
"It was right in the past not to build more refineries, but it was politically embarrassing for them to import gasoline," he said in a presentation to the conference.
US pressure on Iran over its nuclear programme and the threat of future sanctions had probably also helped convince the Iranian government to go ahead with refinery upgrades, he said.
Iran's increasing use of natural gas had helped substitute demand for most oil products except for gasoline. Economically, it may have been better for Iran to export crude and import the motor fuel rather than embark on an expensive refinery upgrade plan that will increase domestic consumption of crude, he added.
The boost in refining capacity will increase Iran's potential export volume of all other products, he said.
Iran is upgrading all of its refineries to boost gasoline output, he said.
Additions
Additional gasoline units at the country's Arak, Esfahan and Adaban refineries should more than meet domestic demand by 2011, Fesharaki said.
A huge new condensate splitter at the Bandar Abbas refinery would give it export capacity beyond 2012.
Iraq introduced a gasoline rationing system in June as it strove to reduce the costly gasoline imports.
That system has reduced imports by more than half to around 94,000 barrels per day (bpd) from around 223,000 bpd, Fesharaki said.
The rationing system had also cut the amount of gasoline smuggled to neighbouring countries, he added. Iran's subsidised gasoline is among the cheapest in the world, encouraging smugglers to ship it to countries paying a higher price.
Rationing had also helped slow gasoline demand growth, which Fesharaki expected to come in at 3.9 per cent per year from 2007-2015, down on the near 10 per cent per year growth of 2000-2006.
Power: Gas oilimports
From 2008 to 2010, Iran will need an average of nearly 70,000 bpd of gas oil imports to help it meet power generation needs during periods of cold weather, Fereidun Fesharaki, chief executive of FACTS Global Energy, said.
After that, the new refinery capacity should allow it to export gas oil, he added. Iran uses gas oil to make up for a shortfall in natural gas supplies when demand peaks during cold weather.
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