Iran is building a $2.8 billion refinery on the Persian Gulf coast to process 480,000 barrels a day of gas condensate for sale in Asia, an official says.

The Siraf refinery will turn the light oil extracted with natural gas into liquids for shipment to global markets, its managing director Ali Reza Sadeq-Abadi has told Bloomberg.

The project includes construction of eight processing units, each with a capacity to produce 60,000 bdp, he said.

It is funded by the Iranian private sector and projected to be completed in three years.

According to Sadeq-Abadi, Siraf will have a capacity to produce about 270,000 barrels a day of naphtha, 140,000 barrels of gasoil, 30,000 barrels of liquefied petroleum gas and 40,000 barrels of kerosene.

It is built in Assaluyeh near the massive South Pars offshore gas field which Iran shares with Qatar.

Exports of condensates have proven their value in the face of a US-led sanctions regime which bans purchases of the Iranian crude oil.

On Tuesday, President Barack Obama renewed those unilateral US restrictions.

Gas condensates do not fall under the sanctions regime. According to the International Energy Agency, cited by Bloomberg, Iran doubled its exports of the product to 200,000 bpd last year.

Iran, under the sanctions, is diversifying beyond oil and opting for better value-added products.

[caption id="" align="alignnone" width="555"] An aerial view from Assaluyeh in the Persian Gulf.[/caption]

Sadeq-Abadi says the country will eventually halt all condensate exports and use the product in its refineries.

Output of the product is expected to rise to more than 1 million bpd over the next few years, allowing Iran to produce more naphtha for sales to Asian chemical companies.

At chemical plants, naphtha is converted into ammonia for fertilizers and plastic-based products such as ethylene and other olefins.

Sadeq-Abadi said consumption of those products “is growing and directly linked to improvement in economic conditions in most countries”.

Iran is the second country after Russia with the largest proven deposits of natural gas put at 33.6 trillion cubic meters or about 18% of total global reserves.

By Press TV