Kish Gas Refining Project to Be Tendered

Kish Gas Refining Project to Be TenderedKish Gas Refining Project to Be Tendered

Plans have been made to put the construction of a huge natural gas refining plant on Kish Island out to international tender.

"The contract to build a natural gas processing complex, worth $800 million, with a capacity of 28 million cubic meters will be put to tender," Abdolreza Haji-Hosseinnejad, managing director of Petroleum Engineering and Development Company, told Mehr News Agency. "In addition to domestic enterprises, foreign companies from South Korea, France and China have also shown interest in playing a role in undertaking the initiative."

Haji-Hosseinnejad noted that Japan’s Marubeni Corporation, as one of the best choices, has already expressed readiness to cooperate with Iran in the oilfield's development. According to the official, plans call for developing the gas field in three phases.

The first phase will be completed with the aim of producing 25 mcm of natural gas as well as 11,000 barrels of gas condensates, for which 14 wells will be drilled.

Asked about the schedule, the official added that drilling operations in the first phase offshore wells have made 75% progress and will be completed by the yearend.

Haji-Hosseinnejad further said the contract to build the power plant in the gas field has already been signed and the offshore equipment will be installed in 10 months.

Founded in 1858, Marubeni Corporation is involved in supplying products and services to a wide range of sectors, including energy, metals and chemicals. The National Iranian Oil Company discovered Kish gas field in 2006. As the world's fifth biggest offshore gas field, Kish is estimated to hold 1.9 trillion cubic meters of gas in place, of which 1.4 trillion cubic meters are recoverable.

The field, with a length of about 32.2 kilometers and a width of 22.5 kilometers, has reserves lying at a depth of 3,800 to 4,300 meters and holds at least 1 billion barrels of condensates, of which at least 331 million barrels are recoverable. Kish Island's gas is sweet and has the potential of producing 4 billion cubic meters of natural gas per day.


  MoU to Reduce Mazut Production

According to Saeed Mahjoubi, the head of quality control at the National Iranian Oil Distribution Company, a memorandum of understanding was signed between the National Iranian Oil Company and an unnamed Japanese enterprise to reduce the production of mazut in Abadan and Tehran refineries.

Underscoring the importance of implementing initiatives to cut down on low-value added commodities such as mazut in refineries, Mahjoubi said, "The contract calls for conducting preliminary studies to reduce mazut production capacity and devise judicious consumption strategies in refineries."

Stressing that optimization plans have been implemented in Shazand Refinery, the official said foreign companies from South Korea and Japan have shown interest in investing in Iran's refining projects, as improving oil products' quality  tops NIOC's priorities.

Oil officials believe that due to the mass production of mazut in refineries as their Achilles' heel, most refining units across the country will go bankrupt unless they are financially supported by the government.

Iran is ranked 11th, ninth and 13th in terms of oil refining, gasoline and diesel production capacity respectively, yet when it comes to producing low-valued mazut, it is among the first manufacturers in the world.

Abbas Kazemi, managing director of the National Iranian Oil Refining and Distribution Company, has already announced that converting Mazut to higher value added products such as gasoline and diesel is amongthe  Oil Ministry's main development plans whose implementation requires an investment of $3 billion.