Iran exported much of its condensate to Asia, with South Korea and Japan being major customers, but US sanctions in 2018 led to a sharp decline in the exports.
The sudden halt meant Iran had to store large volumes of condensate in oil tankers, incurring high demurrage costs, but the country largely avoided the expense and disruption thanks to the operation of two major refineries in the country.
Zangeneh said on Monday all Iranian condensate exports will stop in the current Persian year that ends in March 2021. They will be processed in the Persian Gulf Star and Siraf condensate refineries to produce gasoline and naphtha.
Naphtha is a gasoline blending component and a feedstock for plastics and other petrochemical products. Asian customers favor Iran’s South Pars condensate for its rich naphtha yield compared to other grades.
South Korea was the biggest client of Iranian condensate with 300,000 barrels per day (bpd), but the country stopped the imports even before the US sanctions came into effect in November 2018. The United States is reportedly pushing its condensate and also naphtha on South Korea.
Before February, about 130,000 bpd of Iran’s gas condensate was used in its petrochemical plants, while another 80,000 bpd went to domestic condensate refineries not including the Persian Gulf Star.
The Persian Gulf Star Refinery currently receives 420,000 bpd of gas condensates. Its third phase was opened in February which made Iran self-sufficient in gasoline. The completion of the fourth phase will open another 60,000 bpd capacity for condensate feedstock.
Iran is building another refinery, the $2.8 billion Siraf plant, with a capacity to process 360,000 bpd of gas condensate. It includes six processing units, each with a capacity to turn 60,000 bpd of condensate into better value-added products.
The country expects its condensate production to hit 1 million bpd.
The launch of the Persian Gulf Star Refinery’s third phase in February also raised the overall gasoline production capacity to 105 million liters a day.