Iran Allocates $2.7 Billion for Southern Oil Refinery, Mehr Says

Iran has allocated 2.1 billion euros ($2.7 billion) to build an oil refinery in the southern Hormozgan province that will begin operations this year, state- run Mehr news agency reported, citing an energy official.

Iran is halfway through the construction of the plant, which will add 27.6 million liters to the country’s daily gasoline output, said Ebrahim Azizi, governor general of the Hormozgan province where the Persian Gulf Star facility is located. The refinery will also produce about 14 million liters of diesel, 3.8 million of liquefied petroleum gas, and 3.3 million of jet fuel, Azizi said, according to Mehr today.

In the first phase of its operations, scheduled to start before June, the site will be able to refine 120,000 barrels of condensates a day, Azizi was quoted as saying by the official Islamic Republic News Agency yesterday.

Iran, one of the largest oil producers in the Middle-East, used to rely on imported gasoline because of smuggling and a lack of refining capacity. Since 2007, Iran has managed to curb its domestic consumption by rationing subsidized gasoline and phasing out energy subsidies. In 2011, authorities said the nation has become self-sufficient in gasoline production amid energy and trade sanctions imposed over its nuclear program and started exporting the fuel.

The Gulf state shipped more than $52 million of the fuel in the past 12 months, which represents a 100 percent increase from the year-earlier period, Tehran Times reported on March 6. Export destinations include Armenia, Afghanistan, the U.A.E, Iraq and Oman, Mehr said today.

Iran may build “small refineries” in Algeria, Angola and South Africa, Tehran Times reported today, citing an unidentified person, without providing any details.

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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