Now, the process of phased delivery of domestically manufactured equipment is under way. That has led to further interaction between affiliates of National Iranian Oil Company (NIOC) on one side, and domestic manufacturers on the other. Pursuing the approach of taking maximum benefit from domestic manufacturing potential, NIOC has led its projects based on the capabilities of Iranian contractors and manufacturers. Various projects show incorporation of domestically manufactured equipment. According to Minister Zangeneh, more than 80% of non-rotary petroleum industry equipment is made in Iran, indicating the capacity of domestic manufacturers.

Independence of wellhead and downhole equipment imports, building and installing domestically built wellhead pumps, countdown for mass production of homegrown rock drills, empowering Iranian manufacturers in building flowlines and the success of knowledge-based companies in building drilling measurement tools represent only part of NIOC achievements.

Seamless casings of up to 20 inches  in diameter, welded casings of 20-30 inches in diameter, corrosion-resistant alloy (CRA) tubing, drilling pipes and seamless pipes of more than 6-inch in diameter are among the 10 groups of widely-used petroleum industry pipes.

It is noteworthy that the only manufacturer of seamless pipes in Iran is Luleh Gostar of Esfarayen (LGE). Babak Zand, CEO of LGE, told "Iran Petroleum" that LGE was the first manufacturer of seamless pipes – 6 to 16-inch in diameter – including casing and coiled tubing for the oil, gas and petrochemical sectors. The final objective is to meet petroleum industry needs with a view to regional growth and development. LGE runs five production lines – rolling lines, thermal operations, casing, tubing and coupling. A total of 642 workers are involved in production and supply.

“Most of LGE customers are oil contractors that have either become contractor in the oil pipeline projects or been tasked with the maintenance of wells,” said Zand. “Apart from that, downhole pipes manufactured by LGE are used in activities associated with drilling rigs. LGE is providing services to all these groups.”

Seamless Pipes in Oil Industry

To know more about the significance of seamless pipes in the petroleum industry, it would be enough to have a glance at the “oil production potential” project based on which 15 items of necessary commodities for projects are listed in the tender bid documents. Contractors are required to order these commodities only to domestic manufacturers.

In addition, a list of 84 items whose domestic prototypes are available and therefore whose purchase from abroad is banned are presented as binding documents. Seamless pipes are classified under this category.

Masoud Karbasian, CEO of NIOC, said implementation of 10 agreements signed in 2018 for enhanced oil recovery was being watched closely.

“The share of domestic manufacturers in these agreements is more than 70%, which would exceed 80% once all packages have been implemented,” he said.

The list includes LGE-manufactured seamless pipes for which agreements have been signed. Three of them are as follows: €20 million agreement between contractors of the second phase of enhanced oil recovery and LGE for manufacturing casing and line pipes, agreement for the manufacturing and supply of 15,000 tonnes of seamless pipes in the Forouzan, Siahmakan, Ahvaz 1, Ahvaz 4 and Mansourabad, and €6.5 million agreement for the supply of casing to wells in the Forouzan field. In the absence of foreign companies and under unprecedented US sanctions, the significant role of LGE in the Petroleum Ministry’s most important project, i.e. enhanced recovery, is visible.

Seamless Pipe Supply

Minister Zangeneh has said a major achievement of enhanced recovery projects was the rising demand for Iranian-made equipment.

“Once, if for instance LGE referred to us for 20,000 tonnes, but now this plant is running at full capacity and we need more. That shows the existing capacities for manufacturing seamless pipes are not sufficient. Or we have still weaknesses in the CRA pipes,” he said.

Zand said the nominal production capacity of LGE was 100,000-120,000 tonnes a year, adding: “By signing new agreement and receiving new orders, we are approaching the practical capacity of the plant and we will respond to more demand through arrangement with the Petroleum Ministry and the Ministry of Industry, Mine and Trade.”

He said there was no problem with supplying the needs of petroleum industry projects, adding that filling no order would be delayed.

“Based on plans, we hope to be able to supply oil projects’ needs on schedule,” he added.

Zand said LGE’s top priority in next calendar year would be to concentrate on the development of 28 reservoirs located in Khuzestan, Bushehr, Fars and Kohguiluyeh & Boyer Ahmad provinces. He said that requirement for using domestically-manufactured commodities, giving social responsibility a 4% share in the projects, hiring of local manpower and environmental considerations are among specifications of this new project.

Quality of Iranian Products

Zand said Italy, France, Russia and Ukraine were among leading manufacturers of seamless pipes, i.e. foreign rivals of LGE.

Asked about the quality of Iranian-made commodities and their adaption to international standards, he said: “The petroleum industry applies tough standards. We may not conduct many of tests in the country, but our quality has been endorsed. [Our commodities] are used in all wells across the country and they have had good feedback.”

He added that foreign experts from various nations had visited LGE, saying the Iranian company’s products were on par with European firms’ commodities.    

He said LGE products cost even lower than Chinese commodities, adding: “In other words, we supply high-quality products with below-market prices.”

Domestic Potential

Amid speculation about changes the international atmosphere as a new president has taken office in the US, companies like LGE may be worried about losing their standing in the market as the country may open up to foreign companies. Zand said: “We have proven our capability.”

Asked about obstacles to domestic manufacturing, he said that the main issue was the timely supply of products.

“If we change the pipes’ diameter at long intervals, we can fill orders more effectively. NIOC can accumulate orders and provide us with them. That would accelerate our work and we can deliver orders more effectively and the projects would go ahead,” said Zand.

Given the 11-month activities of LGE, he said the company had grown 70% year-on-year.

“If we go ahead as planned, we will break all manufacturing records. We envisage a tough plan for next year, which we hope we can realize,” he said.

Many other Iranian manufacturers have also benefited from economic sanctions to create opportunities. Many projects have got under way in recent years with the help of domestic manufacturers. The Goreh-Jask crude oil pipeline is a case in point. This project symbolizes domestic manufacturing.

Courtesy of Iran Petroleum