The National Iranian Oil Company (NIOC) is to put 20 million cubic meters of associated petroleum gas (APG) on auction for private investors, IRNA reported.
Investors have until January 9 to submit their bids, and winners will be announced by mid-February. Winners are required to generate value added from APG within a year.
APG, or associated gas, is a form of natural gas which is found with deposits of petroleum. It is often released as a waste product from the petroleum extraction industry. When it is burnt off in gas flares, it is referred to as flare gas.
The NIOC has plans to extinguish around a hundred flares by the end of the present Iranian calendar year (March 2015). It has 960 flares in oil and gas fields, 200 of which have been extinguished.
The flaring of APG is controversial as it is a pollutant, a source of global warming and a waste of a valuable fuel source. APG is flared in many countries where there are significant power shortages.
It can be utilized in a number of ways after processing, such as being pumped in gas distribution networks, used for electricity generation with engines or turbines, reinjected for enhanced oil recovery, or used as feedstock for petrochemical complexes.
Ali Kardar, the investment deputy at the NIOC underlined the auction of APG to the private sector as "legal and win-win."
According to a World Bank report published last year, Iran is third in the world in flaring APG after Russia and Nigeria. Close to 20 mcm of APG is burnt in Iran's offshore and onshore fields.
The World Bank estimates that over 150 billion cubic meters of natural gas are flared or vented annually. This amount of gas is worth approximately $30.6 billion, equivalent to 25 percent of the US annual gas consumption and 30 percent of the European Union's annual consumption.
