Iran expands condensate stocks amid delays to new processing capacity

By ANTHONY DiPAOLA
Bloomberg

Iran’s delay in starting the Persian Gulf Star refinery means it’s being forced to boost stockpiles of condensate, a light oil found in natural gas deposits, said four people with knowledge of the situation.

The 360,000-bpd Persian Gulf Star refinery won’t start this year as planned, leaving excess condensate supply from the South Pars gas deposit, said the people, asking not to be identified because the information is private. State-run National Iranian Oil Co.’s press office didn’t respond to two calls seeking comment on Thursday, a weekend day in Iran.

Iran’s stockpiles are growing as international sanctions are curbing exports of crude oil. The Gulf Star refinery, meant to process the condensate from South Pars, may not start until the second half of next year, two of the people said.

“The Persian Gulf Star refinery is the most important refining project in Iran,” said Siamak Adibi, a London-based analyst at Facts Global Energy. “Iran wants to eventually cut condensate exports to zero by using the fuel to make gasoline and becoming self-sufficient.” Iran now imports gasoline to meet domestic demand.

Iran is producing about 500,000 bpd of South Pars condensate, the people said. That’s up from the 350,000 bbl produced on average daily last year, FGE’s Adibi said. Iran is storing the fuel on tankers in the Persian Gulf and in onshore tanks in Dalian, China, the people said.

Iran’s exports of crude and condensate fell to 1.4 million bpd on average last year due to sanctions, the US Energy Information Administration said on its website Wednesday. Sales averaged about 2.6 million bpd in 2011, before the US and European Union imposed the restrictions, the EIA said.

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