This was possible thanks to “connecting (almost all) thermal power plants and industries (steel and cement plants) to the gas grid and the resultant decline in consumption of liquid fuels in assorted sectors,” ISNA quoted Hassan Montazer-Torbati as saying.
Liquid fuels are mainly derived from fossil fuels and many have a primary role in the transportation sector and the economy. The fuels include gasoline, diesel, kerosene, LPG, propane, butane, jet fuel, methanol, ethanol and butanol, according to Financial Tribune.
While US sanctions on Iran’s oil industry, imposed last year, have reduced crude oil exports to a great extent, oil product sales remain strong generating between $300-$500 million a month, shipping data and Reuters calculations show.
Sanctions have barely affected Iran’s exports of oil products, primarily fuel oil used for power generation and shipping as well as LPG used as cooking gas and petrochemical feed.
Experts consider increasing crude oil refining capacity as a viable option to evade the US penalties in the short term. They believe that under the present conditions exporting oil derivatives is less challenging than crude oil because it cannot be tracked.
Unlike crude oil, where the ultimate buyer is a refinery, fuel oil and LPG can find their way to potentially thousands of small-scale industrial or residential buyers.
Despite the challenges, Iran declared self-sufficiency in gasoline production after inaugurating the third phase of the Persian Gulf Star Refinery last February.
Gasoline Output and New Markets
Gasoline production now is 115 million liters per day while consumption is around 75 million liters. The government started exporting gasoline for the first time last year.
Since mid-summer the government has been offering surplus gasoline on the energy bourse. Neighbors including Iraq, Afghanistan, Pakistan and Armenia are said to be the main buyers and those in charge say there are plans to find new markets.
Other oil derivates like diesel, mazut, kerosene, jet fuel and liquefied natural gas, including LNG and LPG, are exported to neighboring countries via land borders as well.
More than 1.3 million tons of petroleum products have been exported to neighbors through land borders in the past four years.
Speaking about new opportunities for investors especially private companies in the energy sector, Montazer-Torbati said: “Using advanced technology in power plants helps cut gas consumption by 20%. This means 14 billion cubic meters of natural gas will be saved annually, which can be exported and generate $3.5 billion a year”.
Almost 95% of domestic thermal power plants are gas-fired and used 67 billion cubic meters of gas in the last fiscal year (March 2018-19).
Iran has abundant natural gas deposits and it is more cost-effective to use gas for generating power instead of dirty liquid fuels.
Gas production capacity has reached 700 million cubic meters a day, 630 mcm of which is extracted from the giant South Pars Gas Field.