Dubai, Jan 31 (Agencies): Iran will open what is being touted as the Middle East's largest oil refinery, Shazand, in the central Iranian city of Arak in the next few days, according to a news report.

Once the first phase of the USD 3.5 billion Shazand oil refinery comes on stream, some 2 million barrels per day would be added to the country's gasoline production capacity.

Subsequently, following the completion of the remaining development phases under the refinery project, the nation's gasoline production capacity would be raised by 16 million barrels per day, the Tehran Times has reported.

According to the report, the gasoline production unit of Iran's Abadan oil refinery will also be inaugurated in the next few days. The unit was completed at the cost of USD 1 billion and would add over one million barrels to the country's daily gasoline production capacity.

The new development plans for the oil refinery industry are focused on reduction of sulfur and other pollutants in order to produce Euro-5 norms-compliant petrol for cars, the report said.

In addition, the plant will produce propane, also known as propylene, which is a waste product created when crude oil is refined into gasoline, diesel and other products.

The current oil products storage capacity in the country is around 11.5 billion litres, but it will reach 16.7 billion litres by the end of the Fifth Five-Year Development Plan (2010-2015), he added.

In December, the National Iranian Oil Products Distribution Company Managing Director Farid Ameri said that Iran will increase its fuel storage capacity by 5 billion barrels to over 16.7 billion litres.