Iran's NISOC Signs Contracts to Cut Flaring

EghtesadOnline: The National Iranian South Oil Company seeks to further reduce flaring and burning of associated petroleum gases from oil and gas sites in the southern and southwestern regions it operates, including Bushehr, Khuzestan and Kohgilouyeh-Boyerahmad, the managing director said.

News ID: ۷۴۸۸۴۴

02 November 2019

“Several contracts have been signed that will usher positive economic and environmental consequences for the nation and the region,” Ahmad Mohammadi was quoted as saying by the Oil Ministry news service Shana.

Flaring is the burning of natural gas that cannot be processed or sold. The collection of APG is an important safety measure at many oil and gas production sites, as it prevents industrial plant equipment from over-pressuring and exploding.

The NISOC has signed a $1.1-billion deal with the Persian Gulf Bid Boland Gas Refinery to collect the flare gas, Financial Tribune quoted Mohammadi as saying.

“Within the framework of the contract and according to projections, about 11.3 million cubic meters of gas per day will be collected from Gachsaran region and districts in east of Khuzestan,” he added

Another contract has been signed with Marun Petrochemical Company valued at $200 million, based on which more than 5.6 mcm of gas in the Marun and Ahvaz districts, central regions of Khuzestan, will be collected on a daily basis.

According to a memorandum of understanding signed between the NISOC and Bakhtiari Petro Refinery, about 3.4 mcm of APG will be collected in north of Khuzestan, Mohammadi said.

Smoke-Free System

Iran has made progress in using flare gas either for power generation or as a feed to refineries. Reports say the government has recently 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 using the flare gas for generating electricity.

A smoke-free flare system for Ahvaz Operating Unit No. 2 was launched last week in order to reduce environmental pollutants.

By launching the system, environmental pollutants in the vicinity of Ahvaz City, capital of Khuzestan Province, will be reduced as it helps prevent burning of 283,000 cubic meters of gas per day. NISOC experts had developed the system domestically.

Iran has prevented the flaring of 12 billion cubic meters of APG, a source of global warming and a waste of valuable fuel, since 2008.

Despite the measures, Iran 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 a report by the Majlis Research Center, approximately 17 bcm of gas is flared and wasted in Iran annually -- $6 billion net loss for the treasury!

Gas flaring is a global problem and getting worse. The World Bank reported a 3% increase in gas flaring on a global scale last year.

The report said oil production sites around the world were burning approximately 140 bcm of natural gas annually.

The United States was responsible for the biggest portion of this increase, with its own national rise in gas flaring at 48% compared to 2017.