Construction of the refinery started in 2006, but the project was delayed as the result of some  financial limitation due to the sanctions against Iran.

Planned to have a total crude oil processing capacity of 360,000 barrels per day, Persian Gulf Star is projected to be complete by the end of the next Iranian calendar year 1397 (March 20, 2019).

The facility is owned by Oil, Gas and Petrochemical Investment Company (49%), Oil Industry Pension Fund (33.1%) and National Iranian Oil Refining and Distribution Company (NIORDC) (17.9%).

The project is estimated to be completed at a cost of approximately $3.4bn.

Once fully operational, the refinery will add over 36 million liters of Euro-4 and Euro-5 quality gasoline to the country’s gasoline production capacity to increase it to 100 million liters per day.

When the first phase of Persian Gulf Star Refinery was inaugurated by President Hassan Rouhani on April 30, 2017, Iran said it is now self-sufficient in gasoline production.

“By inaugurating the first phase of this refinery an old dream came true. We are self-sufficient in gasoline production and in near future we will be able to export,” Rouhani said in the inaugural ceremony of the first phase.

Second phase of the refinery is scheduled to be complete by the end of the current Iranian calendar year (March 20, 2018) adding 12 million liters of Euro 5 gasoline to Iran’s capacity of the product, Alireza Sadeq-Abadi, the managing director of National Iranian Oil Refining and Distribution Company (NIORDC), announced in the inaugural ceremony of the distillation unit of the second phase on February 14.

In mid-December last year, Oil Minister Bijan Namdar Zanganeh said Iran will reach a stable status in gasoline production once the second phase of Persian Gulf Star Refinery comes on stream.

Bringing self-sufficiency for the country in terms of gasoline production, once fully operational, the Middle East’s largest processing facility for gas condensate will also play a big role to turn Iran into an exporter of gasoline.

The big job has already started as the first shipment of Euro 5 gasoline produced by Persian Gulf Star Refinery was delivered to Shahid Rajaee port in south of the country in early December last year.

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“There is bad news and good news,” believes Chris Cook, a strategic market consultant, who also formerly headed the International Petroleum Exchange.

“The bad news is that the Trump administration is intent on making Iranian access to dollars — whether dollar payments or dollar investment via equity funding or debt financing — to all intents and purposes impossible, notwithstanding anything in the JCPOA,” Cook said responding to Trend query regarding the Islamic Republic’s capability to draw foreign investment to renew the country’s oil and gas industry.

“The good news is that it is completely possible for trillions of dollars worth of investment to be made in Iran and in neighboring countries without using dollars at all. This is because accounting/pricing — or keeping score — of transactions in dollars is very different from using the dollar clearing system to repay dollar debts or repatriate dollar profits on investment,” he added.

Iran’s Oil Minister Bijan Namdar Zanganeh has in recent years been engaged in updating the long-standing ‘Energy Diplomacy’, developed during the former president Mohammad Khatami’s administration, Cook reminded, adding that this ‘smart energy policy’ instrument consisted of energy swaps, such as the Caspian oil swap (flows of Caspian crude oil into northern Iran, exchanged for flows of crude oil delivered out of the Persian Gulf).

“In addition to reactivation of these and similar swaps, perhaps the most remarkable — and most important — ‘Energy Diplomacy’ was the recently contracted South Pars 11 investment by Total, through which 20 years’ investment of technology, skills and experience will be swapped for a flow of condensate. The outcome is firstly a ‘smart swap’ of intellectual value for the value of carbon fuels, and secondly, through the participation of Chinese investors the deal provides 20 years’ security of condensate demand for Iran and 20 years’ security of condensate supply for China,” Cook suggested.

“The point is that such smart swaps will — within a suitable networked market platform or ‘energy clearing union’ — enable many hundred billion dollars worth of intellectual and other resources required by Iran to be swapped for many hundred billion dollars worth of carbon fuels supplied by Iran.

“Since such swaps do not take place on the oil market platform dominated by the US, they do not require settlement in dollars through the US dollar clearing system from which Iran is effectively excluded.”

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