NDF to Allocate $600m for Kharg NGL Project

NDF to Allocate $600m for Kharg NGL Project
NDF to Allocate $600m for Kharg NGL Project

Of the $2.1 billion required for construction of Kharg natural gas liquids (NGL) project, $600 million is planned to be taken from Iran's National Development Fund (NDF),  and the balance from the annual (March 2014-2015) budget.

 Saeed Hafezi, managing director of the Iranian Offshore Oil Company (IOOC) on Sunday expressed guarded optimism regarding the provision of "private funding" projected in the budget for continuation of the  energy project, which he said, is close to 45% completion.

The Kharg Island gas and NGL recovery project is being developed by the IOOC. It involves construction of a gas treatment plant and an NGL recovery facility on the island off the Persian Gulf. The two facilities will receive and process gas from both onshore and offshore sources. 

"We have met the managing director of the NDF and hope that with its $600 million the (Kharg) project will be completed in 18 months," Hafezi said, IRNA reported.

According to Hydrocarbons Technology, about 300MMcfg/d of gas will be gathered from offshore fields and another 300MMcfg/d from onshore processing facilities. Onshore gas will be fed from the Aboozar; Dorood I, II and III; and Foroozan oil processing facilities. Offshore gas will be gathered from the Aboozar, Bahregansar, Foroozan, Nowrooz and Soroosh fields.

The project will help reduce flaring of 600MMcf/d-700MMcf/d of gas from the said fields. It will also help Iran follow the guidelines of the Kyoto protocol to reduce flaring.

The NDF is Iran's sovereign wealth fund, founded in 2011 to replace the Oil Stabilization Fund.

Based on Article 84 of the Fifth Five-Year Economic Development Plan (March 2011-2016), the NDF was created to invest a portion oil/gas export earnings for future generations. 

According to recently published reports, nearly 23 percent of the export earnings went into the NDFI in 2013. This share is forecast to reach 32 percent within two years.