27 September 2020 - 17:40
  • News Code: 307750
€4.7bn Oil Projects Inaugurated

TEHRAN (Shana) -- President Hassan Rouhani recently inaugurated through videoconference a project for the development and optimization of gas dispatching center and IGAT-6 and IGAT-9, Phase 1 of the Bushehr Petrochemical Company and the 500-MW West Karoun combined cycle power plant and its related power supply facilities. The total investment made in these three projects stands at €4.7 billion.

Addressing the inauguration ceremony, President Rouhani highlighted the achievements of his administration in the gas, gasoline, gasoil and petrochemical sectors for the next administration.

“Owing to major work done in the joint oil and gas fields under the current administration, our gas production from joint reservoirs has increased 2.5 times and our oil production 6 times,” he said.

Rouhani said implementing such projects under tough conditions was significant, adding that the future administrations would benefit from the achievements of the present administration.

He also touched on US sanctions imposed by Donald Trump on Iran’s petroleum industry, adding: “Our oil production from the jointly-owned oil fields in West Karoun has increased from 70,000 b/d (in 2013) to 400,000 b/d (2020). Had this wicked person not come to power in the US, our production from these fields would have exceeded 1mb/d.”

Iran’s gas industry has recorded significant growth in the past seven years and Iran has managed to increase its gas production and raise its gas supply coverage to 95%.

Describing Iran’s gas distribution network as unique, Rouhani said Iran’s total gas production had gone from 600 mcm/d to 1 bcm/d.

Iran's next presidential election is set for June 2021.

Rouhani touched on the legacy of his two administrations for the next administrations, saying: “All South Pars phases, except for one phase, are complete. We have become self-reliant in gasoline, gas and gasoil production. When the next administration takes office, our petrochemical production capacity has reached 100 million tonnes from the previous 56 million tonnes with an export value of $25 billion from $11 billion. These are all the current administration’s gifts for the future administrations.”

Gas Export Capacity

Iran’s Minister of Petroleum Bijan Zangeneh also touched on the success of the petroleum industry in development and operation despite sanctions being in effect.

“Despite the toughest sanctions, the petroleum industry has been successful in operating production installations and has pushed ahead with development projects under such tough conditions,” he said.

Breaking down the €4.7 billion investment, Zangeneh said €3.1 billion was invested in the Iran Gas Trunkline 6, Iran Gas Trunkline 9 and their stations, €1.3 billion in the Bushehr petrochemical plant and €320 million in the West Karoun power plant.

He said the newly-operated gas projects would serve gas transmission and the stability of gas network.

Zangeneh said due to long distance between Iran’s main gas production centers in the south and the main gas consumption centers in central, northern, northeastern and northwestern areas, there is no option but to transmitting gas via pipeline.

“Transmission of 100 mcm/d of gas requires 156-inch pipe and several gas compressors. Construction of each kilometer of 56-inch pipe varies between $1 million and $2 million while each gas compressor costs €75 million. Therefore, in order to transfer 600 mcm/d of gas from Assaluyeh to other areas, we would need more than 6 trunklines and dozens of gas compressors,” he said.

Zangeneh said: of the €3.1 billion invested in IGAT-6 and IGAT-9, €1.4 billion had been provided by the private sector for a build-operate-transfer (BOT) project. “That enabled us to export gas to Iraq,” he added. Zangeneh said Iran was exporting 80 mcm/d of gas to Turkey and Iraq.

95% Covered by Gas Network

Zangeneh touched on the newly inaugurated national gas dispatching project, saying: “The National Iranian Gas Company’s dispatching was designed and implemented in 1997 when I joined the Petroleum Ministry. However, due to the extent of the gas network in the country, it was upgraded and renovated.”

Noting that the dispatching division was charged with commanding and monitoring the gas network, the minister said: “Gas refineries, gas compressors and gas pipelines all operate under the national gas dispatching center. The dispatching center makes decisions with all tools at its disposal and the information it receives regularly in any time of the day depending on the requirements.”

Zangeneh said there was more than 37,000 km of gas transmission line in Iran, adding: “Currently, nearly 94% of Iran’s population, small and large-sized industries and power plants are covered by the gas network. The dispatching center is tasked with maintaining gas pressure in the network to guarantee constant gas supply.”

Extension of NIGC’s dispatching center, laying 1,850 kilometers of IGAT-6 and IGAT-9 and five gas compressors are the projects that have already come online.

Hassan Montazer Torbati, CEO of NIGC, has said the data is updated every three seconds at the dispatching center of NIGC.

He said that the IGAT-6 and IGAT-9 crossing Iran’s western gas corridor would connect the central and western corridors and supply gas to western provinces from two ways.

He also touched on increased gas production at the giant South Pars gas field and its role in accelerating the operation of IGAT-6 and IGAT-9, adding: “This corridor carries gas from Assaluyeh to Miandoab and we plan to extend this line as far away as Bazargan if our gas exports are expanded.”

IGAT-6 can carry 110 mcm/d of gas from South Pars to western provinces. It can carry gas to Kurdestan Province after crossing Bushehr, Khuzestan, Lorestan, Ilam and Kermanshah provinces. IGAT-9 is 125 kilometers long with capacity to carry 60 mcm/d of gas. It starts from a spot 32 kilometers west of Behbahan and continues as far away as the Bazargan border and north of Makou. Construction of this pipeline stabilizes gas supply to cold provinces and offers an export privilege, not to mention its role in energy exchanges with regional nations.

Petchem Value Chain

Zangeneh also touched on the inauguration of Phase 1 of the Bushehr Petrochemical Plant, saying: “From the very beginning, the gas supplied from the refineries of SP6-8 was supposed to be fed into the Aghajari field in Khuzestan Province and we had no plan to sweeten gas of these phases. This sour gas (unprocessed gas) was supposed to be transferred to Khuzestan.”

“But the investor offered a proposal based on which part of the gas containing ethane and LPG would be left to the investor to be sweetened and separated for consumption,” he said.

Zangeneh also said that the next stage of investment in this plant was to build a methanol unit, a sweetening unit and a separator for €1.332 billion.

“In the second section of the Bushehr Petrochemical Plant, an olefin, polyolefin and MEG unit is to be built. So far, it has had 35% progress,” he said.

The minister said the project was an indication of economic resilience, focus on no-sale of raw materials and completion of the value chain.

“The gas that is separated and sweetened today is generally the most valuable ethane petrochemical feedstock that is added to the value chain in the country,” he added. 

The Bushehr petrochemical company, as one of the largest petrochemical plants in the Middle East, has been built in Phase 2 of Assaluyeh in Bushehr Province. This plant has three phases. Phase 1 includes gas sweetening units, ethane recovery, methanol production and related facilities. Phase 2 of Bushehr Petrochemical Plant receives 9.6 mcm/d of rich sour gas from the fourth refinery (SP6, 7 and 8) to supply 1.65 mcm/yr of methanol, 1.323 mcm/yr of methane, 850,000 tonnes/yr of ethane, 130,000 tonnes/yr of propane, 30,000 tonnes/yr of butane, 3,000 tonnes/yr of pentane plus and 125,000 tonnes/yr of sulfur. Ethylene, ethylene glycols, high-density polyethylene will be produced at Phase 2, and acetic acid and vinyl acetate will be produced in Phase 3.

Mohammad Hassan Tavallaei, CEO of Armed Forces Social Security Investment Company, said the gas fed into the plant is the sour gas which would be converted to downstream products. The Bushehr petrochemical plant is the only petrochemical plant in the country using sour gas for conversion to products.

Tavallaei said a plant receiving unprocessed gas to supply final products thanks to its full value chain was a turning point in the petrochemical industry.

West Karoun Oil Supply Jumps 6-Fold

The minister of petroleum referred to the West Karoun Power Plant as the third national project inaugurated at the ceremony. He said it was National Iranian Oil Company’s exclusive power plant for for providing the cluster of oil fields in the West Karoun area with electricity.

“In West Karoun’s fields, we have seen a 6-fold increase in production, jumping from 70,000 b/d to 400,000 b/d production capacity. With the completion of the next projects including Azadegan, Yadavaran and Yaran, the production capacity would reach 1 mcm/d,” he said.

Zangeneh said NIOC decided to build a power plant in Khuzestan Province in order to guarantee sustained power supply for oil facilities.

He said NIOC was paying 2.25 cents for power purchase from public power utility MAPNA.

“MAPNA built the power plant in West Karoun under a build-operate-own (BOO) system, and two gas-powered units of this project have become operational. Its steam section is under construction. NIOC has built the transmission network and stations,” he said.

NIOC plans to build a combined cycle power plant in West Karoun with a rated capacity of 500MW in order to supply power to the Azadegan, Yaran and Yadavaran oil fields, Gas and LPG 3200 plant, pumping station and production unit in West Karoun. The first and second gas-powered units of this power plant have become operational with a capacity of over 300MW. The Yadavaran and North Azadegan fields and the West Karoun pumping station have been connected to the power supply network.

Touraj Dehqani, CEO of Petroleum Engineering and Development Company (PEDEC), said sustained production, processing and transfer of oil from West Karoun required sustainable power supply, adding that the power plant built in West Karoun was for that purpose.

Focus on Joint Fields

Zangeneh, who was speaking to President Rouhani through videoconference, said the focus had been on the development of oil and gas fields Iran shares with neighboring countries. He said under the 11th and 12th administrations, production from West Karoun had jumped six times, while South Pars had seen its output grow 2.5 times.

The minister said such increase in oil and gas production could be felt in people’s everyday life, national development and improvement in the environment.

“Since 2013, 216 wells have been spudded in West Karoun’s fields while more than €6.2 billion has been invested there,” he said.

Annual Gas Exports at 16bcm

Minister Zangeneh also said that Iran would see its gas exports reach 16 bcm this year.

“As you know Turkey quitted receiving gas for 2-2.5 months due to a pipeline accident. 50mcm/d of gas is being exported to Iraq and they purchase less gas in the winter. We also pump some gas to Armenia. We have also expressed our readiness for gas delivery to Pakistan, but they refuse to buy Iran’s gas,” he said.

Regarding liquefied natural gas (LNG) exports, he said: “Due to sanctions, we failed to develop our LNG units, but we went towards building mini-LNG units, which was technologically possible. However, due to low LNG prices, the private sector is not interested in investing in mini-LNG units.”

Zangeneh said mini-LNG units would be used for domestic consumption, adding that railroads and locomotives were the best places for mini-LNG consumption.

“We can convert natural gas to LNG at railroad stations and deliver to them. That would end their gasoil consumption and would be economical for us. We have also held talks for trucks to be fueled with LNG,” he said.

The minister said the top priority in mini-LNG units were locomotives. “We can build several mini-LNG units at railway stations. We are in talks with the Islamic Republic of Iran Railroads, to that effect. We have also reached agreement with the Ministry of Road and Urban Development. Each party bears its own commitments. For instance, we (Petroleum Ministry) need to encourage investors and give them incentives, while the Railroads should build LNG tanks on locomotives and at entry points to supply diesel fuel.”

No Concessions to China

Zangeneh also referred to the Farzad-B gas field, saying an agreement for its development would be signed soon.

Asked about sidelining the Chinese in oil projects after news of the planned Iran-China 25-year agreement, he said: “I don’t understand why there is so much sensitivity about presence of China in this country. I think that foreigners are behind so much sensitivity. Anyone who says the MOU is unilateral and bad, may come and sign a similar one with us. If the British say this MOU is bad they can come and sign a similar MOU with us.”

“In our oil talks, we have no concessions to any party. Both parties have agreed to work together. We are ready to work with those interested in the oil, gas and petrochemical sector. But we are not committed to China. Nor is China committed to us. Both sides have shown interest in cooperation,” he said.

Zangeneh said: “as I mentioned earlier that any country except for the Zionist regime can come and work with us. I’m not head of state, but I say that if they are sure we have given concessions to the opposite party, we are ready to sign a similar MOU with them.”

Turkey Needs 130 mcm/d Gas

Asked about the discovery of a gas reservoir in Turkey and rumors of Turkish independence of Iran’s gas, Zangeneh said: “First of all, we need to know precise figures that would have the conformation of international technical bodies. If there is 320 bcm of gas in place, the recoverable part would be 220 to 23o bcm. “Now if this figure is divided by 20 years, it would equal 30-35 mcm/d. In the meantime, it has to be taken into account that investment at a 2,000 offshore depth would be costly, and require high technology.”

“If the figures are precise, 30 mcm/d of gas may be produced, which is important. But as far as we know Turkey currently needs 130 mcm/d of gas, which is imported mainly from Russia and Iran, and partly from Azerbaijan.”

Courtesy of Iran Petroleum 

News Code 307750

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