Iran May Start Exporting Jet Fuel, Hopes for Gas Link to China, Media Say

Iran will soon start exporting aviation fuel processed at its Bandar Abbas refinery in the country’s south, Fars reported, citing an Oil Ministry official.

Several East Asian countries have shown interest in supplies of Iranian jet fuel, the state-run news agency cited Deputy Oil Minister Alireza Zeighami as saying. He did not give a date or identify potential buyers. “The jet fuel production line has started in the Bandar Abbas oil refinery for the first time,” and “initial steps” for exports have been taken, he said.

Iran faces challenges in developing its energy resources due to international sanctions over its nuclear program. The U.S. and European governments accuse the country of seeking to produce atomic weapons, while Iranian leaders say they want nuclear power for domestic energy needs. The Persian Gulf nation is the second-largest oil producer in the Organization of Petroleum Exporting Countries, and its proven reserves of natural gas rank second in size after Russia’s.

Iran says it is already self-sufficient in production of gasoline. The country has exported 1.6 billion liters (422 million gallons) of refined oil products since the start of the Iranian calendar year on March 21, the ministry’s news website Shana reported yesterday, citing Jalil Salari, managing director of the National Iranian Oil Refining & Distribution Co. Salari attributed these exports to a decrease in domestic consumption following cuts in energy subsidies in December, according to the report.

Refining Priorities

Speaking today, the country’s oil minister, Rostam Qasemi, said one of the ministry’s “priorities” is to convert Iran’s crude to refined products, Shana said today. Qasemi also warned that the country needs to sustain a “suitable” volume of oil and gas output in the face of sanctions to avoid an economic setback.

The government agreed in June 2010 to build a pipeline to export 21.5 million cubic meters a day of gas to neighboring Pakistan. It hopes eventually to extend the link to China, Shana reported on Oct. 14, citing Hossein Bidarmaghz, managing director of National Iranian Gas Export Co.

To contact the reporter on this story: Ladane Nasseri in Dubai at lnasseri@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net

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