Persian Gulf Bidboland Refining Company has signed eight contracts worth about $520 million on Thursday with Iranian companies to collect the associated petroleum gas in East Karoun fields, which are mainly operated by the National Iranian South Oil Company.
APG collection projects have been designed with the aim of preventing gas flaring, preserving the environment, creating added value from the gas collected from the fields in the east of Karoun River and providing sustainable feed to petrochemical companies, the Oil Ministry’s news agency Shana reported.
Also on Thursday, storage tanks and facilities of Bidboland Refinery for export products and its independent pier in Mahshahr were inaugurated.
Built on 64 hectares at a cost of $300 million, the facilities have an annual export capacity of 2 million tons of various products, including propane, butane and pentane plus.
Addressing the inauguration and signing ceremonies, Oil Minister Javad Owji called natural gas a clean energy, environment friendly, accessible and cheaper than other fossil fuels and added that the reports of technical committees and the GECF Summit indicate that the golden age of gas has begun and that it would remain on the rise until 2050.
Owji also said investment in the petroleum industry was very crucial for Iran and expressed hope that in less than four years, all the flare gas in east and west Karoun regions that include several large oilfields straddling the Iran-Iraq border would be collected.
“I can confidently say that about 15 million cubic meters of APG will be collected in the next two years, processed at the Bidboland Refinery and be used as feedstock in petrochemical complexes,” he was also quoted as saying by Shana.
“Unfortunately, about 40 million cubic meters are being flared in the country mainly from the oilfields of Khuzestan Province.”
Safety Measure
APG, or flare gas, is gas dissolved in oil. It is a mixture of hydrocarbons obtained from oil extraction and separation processes. The gas can be utilized in a number of ways after processing: as feedstock for the petrochemical industry and for gas distribution networks.
APG collection is an important safety measure at many oil and gas production sites, as it prevents industrial plant equipment from over-pressuring and exploding.
Collecting APG from oil and gas fields is a priority of the Oil Ministry in the framework of the policy to safeguard the environment, curb the loss of national wealth and create jobs.
Iran has made verifiable progress in using flare gas for generating electricity and feeding refineries and petrochemical plants. Published reports say the government has so far invested $5 billion in eco-friendly projects.
However, despite the progress, Iran has the highest rate of energy waste in the form of APG in the Middle East and ranks third in the world in terms of gas flaring after Russia and Iraq.
Bidboland plant is operating with a gas processing capacity of 56 million cubic meters per day and produces 3.4 million tons of petrochemical feedstock annually.
In the last fiscal year (ended March 20, 2021) about 85% of APG were collected from the oil-rich southern regions.
NISOC is responsible for developing 28 oilfields in the two southern regions.
Investmenst Needed
Speaking about the importance of gas industry, Owji said the growth rate of gas in the energy mix is higher than that of other fossil fuels.
“The global price of each cubic meter of gas has reached $2.2 partly because of the Russia-Ukraine tensions and is expected to cross $3 per cubic meter. But in Iran, gas is supplied to petrochemical plants at a rate of 20 cents and about 1-2 cents for household consumers due to the high subsidy allocated to it,” he added.
Stressing that the drop in pressure and the subsequent drop in oil and gas output must be prevented, the oil minister said, “We had a gas deficit of about 250 million cubic meters this year. If we do not invest in the industry, the conditions will become worse in the coming years and we may be forced to import gas and products.”
He added that oil and gas industry has the lowest investment risk and the highest profitability.
Owji said if the oil industry were to operate at full tilt, various sectors could run efficiently and the economy would prosper.
