Iran to Export Gasoline from 2012

A03075068.jpgTEHRAN (FNA)- Iran’s 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 oil producer, but lacks the refining capacity for domestic needs, forcing it to import large amounts of gasoline and burdening its finances.

“Iran will certainly be a sizeable gasoline exporter post-2012,” Fereidun Fesharaki, chief executive of FACTS Global Energy, told Reuters on the sidelines of an energy conference this week.

“The government has gone past the point of no return on this.”

International political pressures rather than economic motivation had played a key role in Iran’s decision to boost refinery capacity, Fesharaki said.

“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 progress and the threat of future sanctions had probably also helped convince the Iranian government to go ahead with refinery upgrades, he said. The US suspects Iran’s nuclear work is to develop bombs, which Tehran denies. Washington has always failed to present corroborative evidence to substantiate its allegations against Tehran.

Iran’s increasing use of natural gas had helped substitute demand for most oil products except for gasoline.

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.

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.

Iran 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 neighboring countries, he added. Iran’s subsidized 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.

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, Fesharaki 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, he said. This winter, it diverted natural gas from industrial users and power generation to meet domestic heating needs during exceptionally cold weather.

Iran has signed a series of deals to export future production of LNG, which is gas chilled to liquid form for easier shipping. It aims to build capacity to ship 77 million tons by 2014.

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