Dehloran Gas Refinery Project Gains Momentum

The delayed Dehloran gas refinery (NGL 3100) project has recently gained momentum as the much-needed funding has been made available, the Oil Industries, Engineering and Construction Company's (OIEC) managing director said on Sunday.

“Operations at the unfinished gas processing plant in Dehloran County in Ilam Province, western Iran, has resumed,” Behzad Mohammadi was quoted as saying by ILNA.

According to the official, plans are in place to develop the jointly-funded gas processing unit, whose development came to a halt due to financial constraints, in three years at an estimated cost of $1.55 billion, which will be invested in two phases.

Mohammadi said without elaboration that resources from the National Development Fund of Iran (NDFI) and OIEC are being tapped to complete the project.

Referring to OIEC's technical capability in undertaking natural gas liquid projects, Mohammadi said NGL 3100 is the fifth plant undertaken by OIEC.

Natural gas liquids (NGL) are components of natural gas that are separated from the gas in the form of liquids in gas processing plants through absorption, condensation or other method.

  Reducing APG

Commenting on Dehloran refinery's plus point, the official added that the initiative will help cut the flaring of associated petroleum gases (APG) in the region that is a major source of pollution, as large amounts of harmful emissions are released in the environment through gas flaring.

According to Mohammadi, Dehloran gas refinery will receive 7.6 million cubic meters of APG per day.

"As soon as the plant goes on stream, 1170 barrels of gas condensates, 2 mcm of sweet gas as well as 3 mcm of sour gas will be produced per day," he said, noting that NGL 3100 will receive its feedstock from Dehloran, Cheshmeh Khosh, West Paydar and Azar Oilfields.

On generating jobs in the region, Mohammadi said the construction work has created jobs for 2,000 people, 60% of whom are local workforce. On the provision of equipment, the official said most rotating machinery, compressors and controlling systems have been indigenized.

Oil Minister Bijan Namdar Zanganeh has highlighted Dehloran refinery as one of the biggest gas projects in Iran, saying that a new petrochemical plant will be established in the region whose feedstock will come from Dehloran refinery.

  Petrochemical Hub

Ilam will become one of the major petrochemical hubs of the country once the new gas refinery comes on stream. NGL 3100 will enable Iran to export petrochemicals to Iraq, according to the minister. APG is a form of natural gas found in deposits of petroleum. It is often released as a waste product. When it is burnt off in gas flares, it is referred to as flare gas.

The government is obliged to curb the flaring of natural gas to 10% or lower by 2021, according to a law passed by the Majlis earlier this month.

The measure was part of a slew of ratifications by the legislature related to the sixth economic, social and cultural development plan (2016-21).

The Oil Ministry is studying several ways to curb APG levels; collecting it for injection into oil and gas wells, converting APG into petroleum products such as natural gas liquids, and using APG for electricity generation.

"Iran has the highest rate of energy waste in the form of APG in the Middle East, and ranks third in the world in terms of gas flaring," according to Bijan Alipour, head of the National Iranian South Oil Company.