Over 707,000 million cubic meters of gas are wasted every day in Bahregansar Oilfield, an Iranian oil official said.
"The gas released as part of the extraction process, called associated petroleum gas, in Bahregansar, was planned to be collected and transferred to installations in Kharg," Mohammad Pour-Gholami added. But the project was abandoned by the Iranian-Emirati company, contracted to carry out the project, as sanctions against the Iranian energy industry intensified in 2012, Mehr News Agency reported.
Western sanctions on Iran's energy industry were intensified over Iran's nuclear energy program. Banning crude exports and cutting off the Central Bank of Iran from the global banking network forced many foreign companies to abandon their contracts with the National Iranian Oil Company.
This included the Iranian-Emirati company in charge of constructing installations to transfer associated gas produced in Bahregansar to petrochemical installations on Kharg Island 25 km off the coast of Iran and 483 kilometers northwest of the Strait of Hormuz.
The report did not mention the name of the contracted company. Iran reached a deal with six world powers in July, agreeing to limit its nuclear energy activities in exchange for sanctions relief. Associated petroleum gas, or APG, is a form of natural gas found with deposits of petroleum and often released as a waste product from the extraction industry. Traditionally, it is burnt off in gas flares, but can be sold and included in the natural gas distribution networks, used for on-site electricity generation, re-injected for enhanced oil recovery, be converted from gas to liquids producing synthetic fuels or used as feedstock for the petrochemical industry.
Over 150 billion cubic meters of natural gas are burnt off or vented annually, the World Bank estimates. This amount of gas is worth approximately $30.6 billion and is equivalent to 25% of the United States' yearly gas consumption or 30% of the European Union's.
Bahregansar produces 60,000 barrels of Iran's lightest crude oil each day. Its 22 wells send the 29 API gravity oil via a 56-kilometer pipeline to its processing plant in the Persian Gulf.
Light crude oil receives a higher price than heavy crude oil on commodity markets because it produces a higher percentage of gasoline and diesel fuel when converted into products by an oil refinery.
After sanctions intensified, production in most fields was capped to avoid overflowing Iran's reserve tanks and tankers that lay dormant. But Bahregansar was spared due to the quality of its oil, which falls into medium category of American Petroleum Institute's crude grading system.
To keep up production, 14 new offshore wells have been planned for Bahregansar. The 50-year-old field is estimated to have 22 billion barrels in place of crude.
