TEHRAN - Iranian Parliament has approved the generalities of a bill for increasing the capacity of the country’s oil and gas condensate refineries by domestic investment, IRNA reported.

The bill was approved by the MPs during an open session of the parliament on Sunday, with 136 votes in favor, 32 votes against and three abstentions.

According to the spokesperson for the Parliament’s Energy Committee, Sakineh Almasi, the bill would increase the capacities of gas condensate and crude oil refineries using public investment.

“Construction of refineries is a clever response by Iran to oil sanctions, and helps boosting production and creates new job opportunities,” she said.
The approval of the bill comes after the Research Center of Iran’s parliament announced last week that petro-refineries are two times more profitable than refineries and suggested that National Iranian Oil Company (NIOC)’s new refinery projects be defined as petro-refineries.

In a report dubbed “Petro-refineries, their role in competing the oil value chain and the status in Iran’s oil industry” stated that constructing petro-refineries is one of the most important ways to alleviate severe economic impacts of price fluctuations and achieve a much higher margin of profit.

The parliament’s research center emphasized the importance of completing the value chain of the oil and gas industry to increase value added and prevent crude oil sales as one of the principles that has been underlined in the country’s Sixth National Five-Year Development Plan (2016-2021).

“According to French energy giant Total, by 2020 global demand for oil products will increase by 1.1 percent while the demand for polymers increases by 3.3 percent, so with this in mind, the creation of a hybrid system of refining and petrochemicals (petro-refinery) seems a necessity,” the report read.

Most of Iran’s refining activities take place in Southern regions of the country were South Pars gas field’s refineries account for refining 74 percent of the gas produced in Iran, according to the managing director of South Pars Gas Company (SPGC).

Currently South Pars refineries refining capacity exceeds 2 billion cubic feet per day.

Since the U.S.’s withdrew from Iran’s nuclear pact in May 2018, vowing to drive Iran's oil exports down to zero, the Islamic Republic has been taking various measures to counter the U.S. actions and alleviate the impacts of the unjust sanctions on its economy.

EF/MA