MUMBAI (The Economic Times) — Iran is planning a massive expansion of its refining infrastructure and has called on India’s No 1 private sector company Reliance Industries (RIL) to set up a greenfield refinery complex and a gas-to-liquid (GTL) plant in the country.

The move is aimed at increasing production of refined products, especially gasoline, because despite being the world’s No 4 oil producer, Iran is the second largest importer of gasoline (over 40% of its total consumption) due to refining capacity constraints.

A high level delegation from Iran led by the energy department head had visited India last month. Members of the delegation held meetings with Reliance officials to discuss the proposal. Marvi, head of energy department, technology cooperation office, Iran said, “We have discussed the proposal to set up a refinery complex and a gas to liquid plant with RIL. Their response was encouraging.” He refused to divulge any details including the proposed investments in the ventures.

Sources confirmed the meeting of Iranian delegation with Reliance international operations president Atul Chandra. RIL, which operates a 33 mmtpa (metric million tons per annum) refinery in Jamnagar, is in process of setting up another 27 mmtpa refinery through its subsidiary Reliance Petroleum.

The new refinery, coming up as an SEZ project, is expected to commence production by the end of 2008. RIL officials declined to comment on the issue. An email remained unanswered till the time of going to print. When asked about the capacity of the proposed refinery, Mr Marvi said, “It would be capable of processing at least one lakh barrels of crude oil per day.”

Analysts believe RIL is the preferred choice for Iran because of its timely execution of mega projects like building complex refineries capable of processing various kinds of crude. Iran is looking on the gas to liquid technologies because it is the second largest gas producer in the world after Russia with 26 trillion cubic meters (TCM) of proven gas reserves.

Gas derived liquids being free from sulfur, aromatics and metals will help the refineries in meeting new guidelines for cleaner fuels and environmental standards.