Gas refineries and petrochemical plants across Iran are operating at half their capacity due to lack of feedstock, deputy oil minister for planning and supervision of hydrocarbon resources said.
“Iran holds 33 trillion cubic meters of the world’s natural gas resources. Regretfully, most petrochem firms and gas processing facilities, including the Persian Gulf Bidboland Gas Refinery in southern Khuzestan Province, have problem completing the value chain of their products,” Sajjad Khalili was also quoted as saying by IRNA.
About 40 million cubic meters per day are being flared in Iran mainly from the oilfields of Khuzestan Province, as the National Iranian Oil Company needs massive investments to collect associated petroleum gas.
“The most money-making industry in the country has long been suffering from lack of feedstock, while 15 billion cubic meters of gas are flared annually,” he rued.
Highlighting the importance of attracting investment to collect APG, he stressed that as long as the feedstock issue is not tackled efficiently, the value-added chain in petrochemical and gas industries cannot be completed, nor can the key sectors be expanded.
NPC Data
According to the National Petrochemical Company data, a total of 55 petrochemical companies in Iran annually use 35 million tons of natural and liquefied gas as feedstock to produce 31 million tons of products.
To help raise annual feedstock supply by 14 million tons, seven projects costing $8.5 billion came on stream in 2021, but a lot more needs to be done to supply the petrochem sector with as much feedstock as it requires.
The initiatives were aimed at collecting and utilizing natural gas burnt off in the southern oil and gas fields.
The Parsian Sepehr Refinery, with two plants in Fars and Bushehr provinces, and three natural gas liquid projects, namely Dehloran Gas Refinery in Ilam Province, Kharg NGL Plant on Kharg Island off the Persian Gulf and the NGL 3200 project in the southern Khuzestan Province were completed last year.
NGL, or natural gas liquids, are components of natural gas that are separated from the gas in the form of liquids. Natural gas liquids are valuable as separate products. Ethane, propane, butane, isobutane and pentane are all NGLs used for a variety of purposes like inputs for petrochemical plants, burned for household heating and cooking, and blended into vehicle fuel.
According to NPC, NGL 3100, a gas venture to collect and process associated petroleum gas from oilfields in Ilam and Dezful, is expected to get 6 million cubic meters of gas per day from Dehloran, Paydar, West Paydar and Cheshmeh oilfields (all in Ilam Province).
Kangan Petro Refining Company became operational in southern Bushehr Province and is refining gas from South Pars Phase 12 and annually supplying 3.5 million tons of value-added products to the downstream sector.
Another project (to help increase feedstock capacity) was the $4 billion Persian Gulf Bid Boland Gas Refinery, which has helped feed petrochemical plants in southern regions and supplies 48 mcm of natural gas per day to the national gas network.
28 Contracts
According to Oil Minister Javad Owji, NIOC signed 28 contracts worth about $1.5 billion in 2021 with Iranian companies to collect associated petroleum gas in Khuzestan’s oilfields.
“APG collection projects have been designed with the aim of preventing gas flaring, preserving the environment, creating added value from gas collected from the fields in the east of Karoun River and providing sustainable feed to petrochemical companies,” he said.
The ongoing initiatives are in different stages of construction and are expected to become operational over the next two years, he added.
Some of the firms with which the agreements were concluded are the Persian Gulf Bidboland Gas Refinery, Oil Turbo Compressor Group, MAPNA Turbine Engineering and Manufacturing Company and Energy Industries Engineering and Design Company.
There are still oilfields where APG is burned off in flares, but negotiations are underway with more local firms to collect it.
“We 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,” he said.
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.
Owji said about 15 million cubic meters of APG will be collected in the next two years, processed at the Bidboland Refinery and used as feedstock in petrochemical complexes.
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.
