AOGC, Private Sector Sign 1st Flare Gas Contract

AOGC, Private Sector Sign 1st Flare Gas ContractAOGC, Private Sector Sign 1st Flare Gas Contract

The first contract to produce 100 megawatts of electricity per day plus 1,300 barrels of liquid petroleum gas and condensates from flare gas has been signed with the private sector, managing director of Arvandan Oil and Gas Company said on Tuesday.

"AOGC and the private sector concluded the agreement with the aim of cutting associated petroleum gas burned off in flares," Soltan Kamali was also quoted as saying by Shana.

According to the official, the contract calls for providing the private sector with 680,000 cubic meters of flare gas per day at an estimated cost of 4.11 cents per cubic meter for five years.

The contractor is required to convert the gas to value added sources of energy such as electricity, which is definitely an eco-friendly measure that can help reduce air pollution.

"As per the contract terms, the contractor will use the gas to produce 1,300 barrels of LPG and gas condensates," he said.

"Furthermore, the energy efficiency in oil installation heaters will increase noticeably. In other words, electricity consumption in such heaters is projected to reduce by 50 megawatts."

Kamali believes that hydrodesulfurization, a chemical process widely used to remove sulfur from natural gas and oil and converting oil to chemical fertilizers, will not only meet farmers' needs to the much-needed product but also help create jobs in the region.

Underscoring the fact that West Karoun oil region will produce 8.5 mcm of associated petroleum gas in the near future, the official said, "As long as refining installations do not go on stream, flare gas should be used to generate 1,000 MW of electricity per day, which equals the production capacity of Bushehr Nuclear Power Plant."

Pointing to AOGC's being a pioneer in signing such contracts, Kamali said, "We have always made an attempt to take effective measures in win-win situations to safeguard national interests."  

Iran has prevented the flaring of 12 billion cubic meters of associated petroleum gas, a source of global warming and a waste of a valuable fuel source, since the first phase of AMAK project went on stream in 2008.

AMAK is Iran's largest environmental project in oil and gas sector, undertaken by the National Iranian Oil Company, and aims to gather associated petroleum gas, or APG, from oilfields.

APG is a form of natural gas found in deposits of petroleum. It is often released as a waste product. When it is burnt off in gas flares, it is referred to as flare gas.

Arvandan Oil & Gas Company, a subsidiary of the National Iranian Oil Company, manages 13 oilfields, from which it expects to produce around 1 million bpd of oil by 2025. These include North Azadegan, Yadavaran, Darkhovein, Sousangerd, Arvand, Jofeir, Band-e-Karkheh, Sohran, Omid, Moshtaq, Khorramshahr, Yaran and Sepehr oilfields.

According to Managing Director of Pars Special Economic Energy Zone Mehdi Yousefi, South Pars gas refineries have managed to reduce energy consumption by implementing optimization tactics. They have also successfully curbed APG which, in turn, reduces air pollution.

Underscoring the fact that flaring the associated petroleum gas in the first 10 phases in the South Pars zone decreased by 43% last year, Yousefi said, "It is projected that by the end of the current Iranian year (March 19), the current APG flaring, amounting to 5 mcm, will reduce to less than 2.8 mcm a week, which will translate into a great environmental achievement."

South Pars is the world's largest gas field shared between Iran and Qatar, covering an area of 3,700 square kilometers of Iran's territorial waters in the Persian Gulf. It adjoins Qatar’s North Field, which measures 6,000 square kilometers.