2 Private Firms, NISOC in Rare APG Contract

2 Private Firms, NISOC in Rare APG Contract2 Private Firms, NISOC in Rare APG Contract

National Iranian South Oil Company signed an agreement on Tuesday to sell around 1.2 million cubic meters per day of associated petroleum gas to the private sector to be used as feedstock for power plants.

The signing ceremony was attended by Vice-President and head of the Department of Environment Massoumeh Ebtekar, as well as Marzieh Shahdaei, managing director of the National Petrochemical Company in Ahvaz.

"After a lackluster tender in 2014, NISOC put out a second tender for selling APG this year and two private companies, namely Hirbodniroo and Tamkar Gas Equipment Co., won the contract to collect APG from four oilfields operated by NISOC," Bijan Alipour, NISOC managing director told Mehr News Agency.

Providing a breakdown on the amount of APG from the four fields, Alipour noted that in the first phase of the contract 396,000 cubic meters per day from Maroun 6, 425,000 cubic meters from Maroun 3, 294,000 cubic meters from Mansouri and 85,000 cubic meters from Krenj Parsi oilfields will be collected to be utilized for different purposes, namely power generation. The rare contract, aimed at also addressing rising environmental concerns, is valid for 5 years.

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

The flaring of APG is controversial as it is not only a pollutant, a source of global warming, but also a waste of a valuable fuel source.

The gas can be utilized in a number of ways after processing; additionally, it can be both sold and included in the natural gas distribution networks, used for on-site electricity generation with engines or turbines, re-injected for enhanced oil recovery or used as feedstock for the petrochemical industry.

  Energy Waste

"Iran has the highest rate of energy waste in the form of APG in the Middle East, and ranks the third in the world in terms of gas flaring after Russia and Nigeria," the official added.

Despite a host of projects implemented to reduce APG flaring, APG volume stood at 25.2 million cubic meters per day in 2014, which equals production from one phase of South Pars gas field.

In an effort to curb the exorbitant waste of APG, the Oil Ministry in November 2014 announced a public tender to put APG to better use by selling it to private firms.

The tender offered 19.6 mcm/d of APG produced in 50 oilfields owned by National Iranian Oil Company's subsidiaries, but failed to attract buyers.

Iran is planning to hold more tenders for its APG output to generate interest from foreign companies due to their advanced technologies that turn power generation via APG into a cost-effective process.