Over the past few weeks Iran, already beleaguered by a raft of existing U.N. and national sanctions, has seen the U.S. and the European Community adding further economic punishments.
Last week the U.S. Senate on a 100-0 vote passed legislation to penalize foreign banks that do business with Iranâs central bank, while this week the U.S. House of Representatives will vote on legislation to punish nations and companies that invest in Iranâs energy sector, furnish it with gasoline, or help it develop chemical, biological, or nuclear weapons or advanced conventional arms.
The European Union recently imposed sanctions on nearly 150 Iranian companies and dozens of individuals and is examining the feasibility of additional measures that could include restrictions on oil imports and gasoline exports to and from Iran.
Many advocates favor restricting Iranian gasoline imports, which in October rose over 21 percent, increasing to 63,279 barrels per day (bpd) from 51,986 bpd in September.
As in earlier threats to its economy, Iran is not taking the latest international threat lying down.
Iranian Minister of Industry, Mining, and Trade, Mehdi Ghazanfari, speaking on 8 December at the inauguration of Iranâs first gas to liquid (GTL) refining facility in Abbasabadâs industrial park told his audience, "Today, on the subject of research and technology, various national technologies have come together to stop sanctions by utilizing advanced technology."
Ghazanfariâs boast is not an idle one, as Iran is now the third country in the world to have developed GTL technology, currently developed and utilized by South Africaâs Sasol Ltd., and the Netherlandâs Shell, running a 14,700 GTL bpd plant in Bintulu, Malaysia. The Abbasabad refinery reportedly will have the capacity to produce 10,000 bpd of high grade gasoline in the near future.
In 1998 Iranian experts began researching GTL technology after western companies refused to sell GTL refineries to Iran because of U.S.-led sanctions on Iran's energy sector. The GTL technology was developed by Iranian energy company SARV. According to Majid Hedayat of Iranâs Industrial Development and Renovation Organization, Iran has produced a catalyst vital to the technology.
Iran is seeking to reach a capacity of one million bpd of GTL-derived gasoline within the next decade. To reach this ambitious goal Iran will need to build 100 10,000 bpd GTL refineries across the country, hoping to site least one $500 million 10,000-barrel refinery in each of Iranâs 31 provinces at a rough total cost of $50 billion, an impressive amount for the country to raise in light of international sanctions.
Not to worry said Ghazanfari, who remarked that the countryâs National Development Fund will partially support the massive project. He also welcomed all foreign and domestic investors to take part in joint GTL ventures, commenting, âWe invite all investors from inside and outside the country to take advantage of this remarkable opportunity. All the technology is available and we will give our full commitment to investors. We also guarantee a decent profit as well as a safe return of their capital. â
Across the Persian Gulf, Qatar, which share the giant offshore south Pars natural gas field, is currently the worldâs largest user of GTL technology, putting the finishing touches on the $18 billion Pearl GTL refinery complex, which along with a smaller associated liquefied natural gas (LNG) plant, will yield $6 billion a year in profits on a projected cost of $70 per barrel of oil, producing over 250,000 bpd when fully operational.
As for Iranâs GTL ambitions, energy officials see their development of the countryâs GTL technology as something adding value to their natural gas exports.
Assuming that the international sanctions donât throttle the economy first.
By. John C.K. Daly of Oilprice.com