Iran on Monday began building its biggest refining plant to convert about half a million barrels per day of condensate into exportable products to Asia. 

Vice President Es'haq Jahangiri attended the ground-breaking ceremony for the Siraf refinery being built with $2.8 billion of investment by the Iranian private sector.

For the next eight months, work will include basic design and construction of joint processing, utility and back-up units after which building of refineries will start.

The refinery will include eight processing units, each with a capacity to turn 60,000 barrels per day of condensate -- a light oil extracted with gas – into better value-added products.

Sixty percent of the feedstock will be turned into 270,000 bpd of naphtha for shipment to Asian chemical makers which convert it into ammonia for fertilizers or plastic-based products such as ethylene or other olefins.

Besides, the refinery will produce 140,000 barrels of gasoil, 30,000 barrels of liquefied petroleum gas and 40,000 barrels of kerosene, its managing director Ali Reza Sadeq-Abadi said last month.

Last year, Iran doubled its condensate exports to 200,000 bpd which helped raise total crude oil exports to 1.5 million bpd, providing timely relief from sanctions as they do not fall under the US-led regulation.

Iran expects its condensate production to hit 1 million bpd in the coming years, enabling the country to export more naphtha to Asia where demand for the substance is growing.

Iranian officials say the country plans to stop eventually all exports of condensate and use it in local processing units.

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

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

Iran is the second country after Russia with the largest proven deposits of natural gas put around 41 trillion cubic meters or about 18% of total global reserves.

By Press TV