Iran Signs Flaring Reduction Contracts
An Iranian state-owned company has signed two contracts with domestic companies with worth a total of $1.216bn to reduce flaring by 8bn m3/yr, equivalent to about half of Iran’s total flaring in 2017.
National Iranian South Oil Company signed contracts with Persian Gulf holding and Maroon petrochemical company September 4 to curb flaring in 32 projects under their management over the next 30 months. Alongside the 8bn m3/yr (22mn m3/d) methane that will be harnessed, 1.6mn metric tons/yr of ethane, propane and butane plus 38,000 b/d of other natural gas liquids (NGLs) will be collected under the framework of the two signed agreements.
Iran increased flaring in 2017 by 1.3bn m3 to 17.7bn m3, according to the World Bank, with only two other countries, Russia and Iraq, flaring more.
Hydrocarbons shortage
During recent decades, Iran has always faced a gas shortage in winter due to increasing demand from households, which disrupts gas supplies to petrochemical plants. They already suffer year-round shortages of other hydrocarbon feedstocks such as ethane. According to an official document, seen by NGW, Iran’s petrochemical plants worked at 68% of nominal capacity during March 20-June 21 this year. Iran inaugurated there new petrochemical units Sep.4, raising nominal production capacity by 3.4% to 65.55mn mt/yr but thereby also increasing their feedstock requirement.
Iran produced 214bn m3 sales gas in the fiscal year ending March 20 2018, of which only 13bn m3 was exported to Turkey, Iraq and Armenia (Iran barters 1 m3 gas with 3 kWh Armenian electricity), according to another document seen by NGW. Iran also produced 6.11mn mt ethane during the 2017-18 fiscal year, expected to reach 8mn mt in the current year and 17.6mn mt/yr by 2020, oil minister Bijan Zanganeh said September 4.