$3b Invested in Khuzestan APG Treatment Plant: NPC

Over $3 billion has been invested in the project, which is the largest APG treatment plant so far in Iran, the news portal of the National Petrochemical Company reported.

APG, or flare gas, is gas dissolved in oil. It is a mixture of hydrocarbons obtained during the oil extraction and separation processes, according to Financial Tribune.

Collecting APG from oil and gas fields is a priority of the Oil Ministry to help safeguard the environment, prevent loss of national wealth and create jobs.

The gas can be utilized in a number of ways after processing: used as feedstock for the petrochemical industry, sold and included in the natural gas distribution networks, used for on-site electricity generation with engines or turbines, re-injected for secondary recovery and used in enhanced oil recovery, or converted from gas to liquids producing synthetic fuels.

APG processed at the Bidboland treatment plant will be used as feedstock for petrochemical plants in the region.

The project is a major environmental initiative in oil-rich southwestern Khuzestan and will be instrumental in developing the petrochemical sector.

Bidboland plant will operate with a gas processing capacity of 56 million cubic meters a day and produce 3.4 million tons of petrochemical feedstock.

There are plans to gather APG in the Persian Gulf Petrochemical Industries Company and Maroon Petrochemical Company. After the projects are completed in two years, the value of their output will exceed $2 billion.

In the framework of commitments to help protect the environment, an estimated 400,000 cubic meters of APG will be collected from Sa’adatabad Oil Field in Fars Province on a daily basis. The projects will take two years to complete.

All the projects are part of a comprehensive plan to contain 90% of flaring gas at production sites and will cost an estimated $8 billion.

Slow Progress

Iran has made progress in using flare gas either for power generation or as feed for refineries. Reports say the government has invested $5 billion in related projects.

The Oil Ministry has adopted several measures to reduce gas flaring, namely collecting APG for injection into oil and gas wells, converting it into petroleum products like natural gas liquids and for power generation.

Since 2008, Iran has prevented the flaring of 12 billion cubic meters of APG, a source of global warming and a waste of national wealth.

Despite the measures, Iran still 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 after Russia and Iraq. 

According to the Majlis Research Center, approximately 17 bcm of gas is flared and wasted annually -- $6 billion net loss for the treasury.

Gas flaring is a global problem that is getting worse. The World Bank reported 3% increase in gas flaring on the global scale in 2018 when oil production sites annually burnt approximately 140 bcm of natural gas.