Oil production from oil fields located in the West Karoun area in western Iran has increased to 350,000 b/d from 70,000 b/d, after the inauguration of the first phases of North Azadegan, Yadavaran and North Yaran oil fields. Iran plans to raise production from these fields to 1.2 mb/d. However, production would make sense when it would be possible to deliver oil to consumers via pipeline. To that end, the Petroleum Engineering and Development Company (PEDEC), has put developing the West Karoun oil fields on its agenda, and plans to establish an integrated system for the transfer of light and heavy crude oil in two phases, a project whose pipeline is 700 kilometers long.

Phase 1 of this project, 300 kilometers long, was inaugurated in 1396- which ended on March 20- and currently 250,000 b/d of crude oil is being delivered from the West Karoun oil fields to export points. Phase 2 of this project is expected to come online in 2020.

PEDEC is tasked with developing independent and shared oil fields in Iran. It is currently operating West Karoun area oil fields – Azadegan, Yadavaran and Yaran with combined in place oil reserves of 67 billion barrels.

In parallel with this development plan, PEDEC is set to transfer crude oil produced at the West Karoun area oil fields to export terminals. This oil transfer project is the chokepoint of crude oil exports from West Karoun. Any delay in the implementation of this project would harm crude oil exports in that area and adversely affect the rapidity and quality of oil exports there.

Objectives

The objective sought through implementation of this project would be to establish an integrated system for the transfer of light and heavy crude oil, including two pipelines and two pumping stations. One of these pumping stations is located in Ab Teimour area on the Ahvaz-Khorramshahr road. In the first stage, 300,000 b/d of heavy crude oil and 254,000 b/d of light crude oil would be carried from the first pumping station to the second pumping station. Then, the heavy crude oil would go to Bahregan terminal and the light crude oil would be delivered to the National Iranian South Oil Company (NISOC) before being piped to the Kharg terminal.

Sirous Aqajari, manager of crude oil pipeline and utilities projects in the West Karoun area at PEDEC, told "Iran Petroleum" that construction of Omidiyeh pumping station lasted from 2009 to 2011. He added that the West Karoun pumping station was built from 2012 to 2017.

"Construction of oil pipelines lasted from 2011 to 2015. The heavy crude oil pipeline has been extended as far as Omidiyeh, while the light crude oil pipeline stretches to the Ahvaz booster station, owned by NISOC," he said, adding that the second pipeline would carry oil to export terminals.

The only remaining part of Phase 1 is the construction of a 30-inch oil and gas pipeline. Aghajari said a tender bid has been launched for this sector and PEDEC was making technical assessment of potential contractors. He added that a qualified contractor would be chosen in the near future.

400,000 b/d Oil Transfer

Aghajari referred to the implementation of Phase 1 of this project last March, adding; "Currently, 150,000 b/d of light crude oil from Yadavaran and Darquain is carried to export terminals by the West Karoun oil pipeline, while 250,000 b/d of heavy crude oil is being transferred from the Azadegan, Yaran and  Yadavaran oil fields to export terminals."

PEDEC has hired five Iranian contractors for developing the West Karoun pumping station, the Ahvaz-Omidiyeh pipeline, Omidiyeh pumping station, Omidiyeh-Bahregan pipeline, as well as Bahregan installations. Iranian consultants have offered necessary advice, while domestic manufacturers have supplied the bulk of commodities needed in the project. PEDEC has had to purchase the main pumps of the pumping station from foreign manufacturers, as manufacturing of such pumps is monopolized by several companies. Aghajari said Sulzer of Switzerland had directly sold pumps to PEDEC. He noted that Iran had been able to purchase all its necessary equipment and commodities without any problem following the implementation of the 2015 nuclear deal with six world powers – dubbed the Joint Comprehensive Plan of Action (JCPOA).

Aqajari said that the first priority was to use domestically manufactured commodities, adding: "For instance, in this project some booster pumps were manufactured for the first time in Iran. Meantime, some valves, flanges and secondary pumps were produced in Iran."

The first phase of this project cost between IRR 4,000 and IRR 5,000 billion.

Phase 2 Set to Start in 2018

Enhancing the oil production capacity of West Karoun oil fields (including Azadegan, Yadavaran and Yaran) is a priority of the National Iranian Oil Company (NIOC). Talks are under way with a view to signing agreements for the development of these fields. NIOC has announced that production from the West Karoun oil fields must reach 1.2 mb/d by 2025. That is why PEDEC is focusing on the second phase of development of the West Karoun pumping stations, as enacted by NIOC. The project is in the stage of tender bid and selection of contractor. The second phase is expected to cost $700 million.

Aqajari said that the second phase was expected to start in 2018 and end by March 2021 with the completion of pumping stations and pipelines. That would allow the transfer of 1.2 mb/d of crude oil from West Karoun to export terminals.

Azadegan Brand; West Karoun Oil

The oil produced in West Karoun oil fields is delivered to buyers of Iran's oil under the Azadegan brand. The oil produced from West Karoun is mainly heavy and ultra-heavy and that is why six pumps would be added to the heavy crude oil pumps already installed in the West Karoun and Omidiyeh pumping stations. However, the capacity of light crude oil does not change.

Aqajari said that three pumps were handling transmission of heavy crude oil and three pumps were used for transmission of light crude oil. In total, 120,000 to 140,000 b/d of crude oil is being pumped from the West Karoun area. After the second phase becomes operational, the number of heavy crude oil pumps would increase in each station, and the oil would be carried to Kharg terminal for export.

Other sections of the West Karoun pumping station development plan include the establishment of a pipeline, 42 inches diameter, which would allow the transfer of crude oil from West Karoun to Bahregan and then to Kharg terminal for export.

Bahregan Export Terminal

Aqajari said the last section of this project included development of Bahregan export terminal.

"Since the Bahregan terminal has announced that it would be able to receive a maximum 200,000 b/d of heavy crude oil from West Karoun, which is much lower than the oil export capacity of West Karoun, we decided to develop this terminal in order to be able to receive heavy crude oil from West Karoun for export," he added.

"We are currently in the stage of selecting a consultant to conduct basic studies," he said. "All consultants in this sector will be Iranian, but we will have to hire a group of Iranian and foreign consultants for the final section of the pipeline (Ahvaz-Omidiyeh-Goureh-Genaveh-Kharg route) stretching from Goureh to Kharg due to the complexities there."

Aqajari said consultants from Britain, Germany and Norway had expressed readiness to get involved in this project.

West Karoun Oil Transfer Artery

Aqajari said the West Karoun pipeline project was the vital artery of crude oil transfer from the fields located in that area.

"In case for whatsoever reason the crude oil transfer chain hits any trouble, that would directly impact oil exports and the quality of crude oil delivered to consumers," he added, noting: "Because in that case we will have to blend the West Karoun oil with oil delivered from NISOC-run fields, which would change the quality of Azadegan oil."

"Therefore, while reducing costs and increasing quality, we have tried our best to implement the project quickly" said Aqajari.

He said that exports would make sense when transfer is possible. "In case oil contracts are implemented in the West Karoun area we will have no problem with regard to enhancing the capacity of transfer of oil from the West Karoun area," he added. "But in case the project becomes operational prior to the implementation of agreements, we will be able to facilitate the transfer of oil from NISOC-run fields to export terminals through pipeline connections."

The West Karoun oil pipeline currently has three connections in Ahvaz, Omidiyeh and Goureh.

Monitoring of Oil Transfer

When asked if contracts for the development of West Karoun fields are signed based on the Iran Petroleum Contract (IPC) model, oil transfer would be awarded to the same contractors, Aqajari said: "In case NIOC decides to also award oil transfer to IPC contractors we will deliver the project to the contractor at any stage; however, PEDEC, on behalf of NIOC, would be monitoring the transfer of crude oil from West Karoun."

"I predict that prior to the completion of development of West Karoun oil fields based on IPC model the second phase of the project would come online, in which case we will deliver the project to the contractor in a more complete form," said Aqajari.

He recalled visits made by foreign experts to West Karoun, saying: "Most foreign companies asked us about the technical specifications of pumping stations in West Karoun and sought information about Iranian manufacturing companies. It was interesting for them to see that oil equipment manufacturing companies in Iran had reached such an advanced level among oil-rich nations and they are now able to manufacture commodities in compliance with such high standards."

"We have no weakness in terms of technical and processing equipment, while we have good local information. Furthermore, foreign companies are well aware that they ought to hire specialists," said Aqajari.

Courtesy of Iran Petroleum