LPG Loading Pier Under Construction Near Asalouyeh

In line with plans to boost liquefied petroleum gas exports, work is underway to build an exclusive loading pier for liquefied petroleum gas, or LPG, at Tombak Port, approximately 50 kilometers north of the port of Asalouyeh in southern Iran, an official at Pars Oil and Gas Company said.

"The initiative, commenced in 2014, has made over 40% progress and is expected to become operational by March 2019 with the help of domestic contractors," Mohieddin Jafari was also quoted as saying by the National Iranian Oil Company's news portal on Monday.

According to the official, the pier includes two LPG loading arms each of which can berth fuel carriers with a capacity of 50,000 tons.

The facility will be equipped with a modern arm to load sulfur for the vessels with capacities ranging from 5-50,000 tons.

Pointing to other installations, Jafari said the construction of two sulfur warehouses as well as a refining unit to help process natural gas from the South Pars phases 22 to 24 are also on the agenda.

The official said Tombak, with a depth of 34 meters, is the deepest port not only in the country but also in the Persian Gulf.

LPG is made up of butane, propane or a mixture of both gases. It is second-best eco-friendly fuel after natural gas and delivered via trunk lines in terms of efficiency compared to diesel or fuel oil.

"Close to 2,600 tons of LPG per day are being produced by South Pars phases 17 and 18," he said, adding that the first LPG cargo of the two phases was shipped in August.

Referring to the country's LPG output, he noted that Iran currently produces 8 million tons of LPG per year, but the volume will double after all South Pars phases come on stream.

According to the official, international economic curbs did not pose a major setback to Iran's share in the global LPG market, but "sanctions removal is an opportunity to expand our foothold".

  Significant Player

According to Mohammad Ali Barati, the head of Iranian Commercial Gas Company, despite competitive market conditions, Iran can emerge as a significant player in the LPG sector by expanding production and trade.

"Iran exports LPG to customers in Asia, including China, Pakistan, Iraq and Turkey," he said, adding that after the lifting of international economic sanctions, Iran and India engaged in talks over a long-term LPG supply deal to the South Asian country.

Data provided by Argus, a leading provider of data on prices and fundamentals, news, analysis, consultancy services and conferences for the global crude, oil products and LPG, show that Iran raised LPG exports to over 5.2 million tons in 2016, from 4.6 million tons in 2015 and made strides into East Asian markets with the delivery of its first cargo to Indonesia in October.

Iran currently accounts for 17% of LPG trade in the Middle East and this is expected to grow to 40% by 2020.

South Pars is the world’s largest gas field shared between Iran and Qatar. Iran is developing the mega project in 24 phases. It reportedly provides more than two-thirds of the country's natural gas.

South Pars holds an estimated 40 trillion cubic meters of natural gas, or roughly 8% of the world’s reserves and approximately 18 billion barrels of condensates. It adjoins Qatar’s North Field that spans over 6,000 square kilometers.