A total of $740 million will be allocated to indigenize turbo compressors and turbines used in the oil industry, the managing director of the National Iranian Oil Company said.
Mohsen Khojstehmehr made the announcement at a ceremony to sign the contract for the manufacture of 14 turbo compressors, 15 megawatts each, between NIOC and the Oil Turbo Compressor Company on Friday, Tasnim News Agency reported.
Stating that rotating equipment, including turbo compressors, in oil and gas facilities are old and have low efficiency, he said, “Due to sanctions, the foreign manufacturers of turbo compressors are not willing to repair such facilities. Therefore, NIOC decided to entrust the production of 14 turbo compressors to OTC and it is the first time the rotating equipment is being indigenized.”
Rotating equipment refers to equipment and machinery that use kinetic energy to move fluids, gases and other materials. The rotating parts of the equipment can include turbines, pumps, generators, compressors or engines.
According to the official, the 14 turbo compressors will be manufactured with an investment of $200 million for the oilfields of southern Iran.
The initiative seeks to renovate and replace worn-out turbo compressors, reduce costs, improve performance and boost gas pressure in the stations of the southern oil-rich regions.
“Nearly $540 million will be allocated for the construction of 60 new turbines and compressors by Iranian companies,” he said.
OTC has also voiced its readiness to manufacture compressors for pressure booster platforms of the South Pars Gas Field.
Compressors are used in oilfields to maintain or boost gas pressure, as it moves along the pipelines to the supplier and final consumer.
Indigenization of Equipment
Iran is 85% self-sufficient in manufacturing parts and equipment needed by the oil and gas industries.
Domestic firms have transferred the much-needed knowhow to produce various equipment from Europe and indigenized the advanced technology.
In recent years, 12,000 items have been indigenized in the oil-rich regions of southern Iran, some of which are strategic items made in collaboration with knowledge-based companies.
Most of the Iran’s petroleum equipment are now designed, engineered and manufactured locally. These include gas and steam turbines, process pumps, air and gas compressors, industrial valves, pressure vessels, heat exchangers, tanks, air coolers, towers, boilers, pipes, fittings, catalysts, drilling bits, wellhead equipment, drilling rig, control and dispatching systems, instruments, switchgears, high voltage cables and accessories.
According to reports, domestically-made oil and gas equipment and parts comply with European standards and have potential customers in the markets of Central Asia, Latin America and Russia, which are not under the US dominance.
Currently, Iran ranks first in the Middle East in the production of oil equipment, despite the US sanctions.
In May 2018, the US withdrew from the Joint Comprehensive Plan of Action (the formal name of Iran nuclear deal) signed between Iran and P5+1 in July 2015, and reimposed unilateral sanctions on Iran.
Still in place, the draconian sanctions have mainly targeted Iranian oil and banking sectors. However, despite all the difficulties caused by the sanctions, the oil industry has made progress in the past four years with the help of local experts.
Several companies in the field have endeavored to reduce dependence on foreign countries.
Gas Industry
The National Iranian Gas Company, a subsidiary of NIOC, has invested $4 billion to fast track the indigenization of vital equipment in collaboration with domestic manufacturers and engineers over the past two decades.
The indigenized equipment include turbines, pumps, anti-corrosion steel pipes, valves, storage tanks, boilers and compressors.
NIGC has also planned to indigenize 29 key equipment in the gas industry and signed several contracts worth $23 million with domestic knowledge-based companies.
Within three years, the country's gas industry will stop importing these strategic items from European countries such as France and Germany.
While the locally-made items will have the same quality as their foreign counterparts and accord with national and international standards, their production cost will be less than half that of foreign counterparts.
