$3.4b Gas Refinery Opens in Khuzestan

EghtesadOnline: The $3.4 billion Persian Gulf Bidboland gas refinery was inaugurated Thursday in Khuzestan Province to trap associated gas from crude oil production instead of flaring, the managing director said.

News ID: ۷۸۵۸۲۲

23 January 2021

"Nearly 60% of flared gas in the three provinces of Khuzestan, Kohgiluyeh-Boyerahmad and Bushehr, will be collected by Bidboland and converted into value-added goods instead of being wasted," Mahmoud Amin-Nejad was quoted as saying by ILNA.

Based in the southwest part of Iran, the plant has a daily capacity to process 56 million cubic meters of associated gas from East and West Karoun oil fields that include several large oilfields straddling the Iran-Iraq border namely Azadegan, Yaran, Yadavaran and Darkhoein.

The massive volume equals gas produced by two standard phases of South Pars, Iran's mega gas field in the Persian Gulf that is being developed in 24 phases.

Construction of the refinery began in 2015 when international sanctions were lifted after Iran signed the historic nuclear deal with the six world powers, formally known as the Joint Comprehensive Plan of Action.

Dynamic Diplomacy

“Had it not been for the deal, much-needed equipment could not be imported,” he said, adding that more robust international diplomacy is required to further develop the key energy sector. According to the official, flaring gas in Khuzestan is expected to zero by 2023.

“Production from the plant can generate $1.5 billion of which $700 million is projected from exports.”

Iran was the world's fourth largest in gas flaring volume in 2019, according to a July 2020 report by the World Bank. Among the top 10, Iran was the only country to show a decline from 2018.

Bid Boland facility will have an annual production capacity of 10.4 million tons of methane, which will be injected into the national gas grid, 1.5 million tons ethane, 1 million tons propane, 600,000 tons gas condensates and 500,000 tons butane to be fed into several petrochem plants in Mahshahr and Gachsaran.

An estimated 900,000 tons of acid gas produced each year in the plant will be injected into oil wells of Aghajari fields in the Khuzestan Province to boost crude production and will yield 600,000 tons of gas condensates.

“Of the total $3.4 billion, $2.2 billion was borrowed from the National Development Fund of Iran, the country's sovereign wealth fund, and the balance was sourced through banks namely Mellat, Parsian, Sepah, Tejarat, and Bank of Industry and Mine.”

Local workforce accounts for 85% of the total 1,100 employees.

ZLD System

The complex has employed modern water treatment systems, including zero liquid discharge (ZLD) system, to curb excessive water consumption.

“Close to one million liters of wastewater is reclaimed in the refinery per day to help save ground resources in the water-stressed region.”

Furthermore, the refinery is equipped with a modern vapor recovery unit that can collect environmentally-hazardous vapors to be reprocessed or destroyed. Officials say Bid Boland will play a significant role in expanding the downstream petrochemical sector.

Iran is striving to diversify its economy and make better use of its hydrocarbon reserves by producing petrochemicals with higher value-added.

Regarding plans to expand flare gas collection in the region, Amin-Nejad said the National Iranian Oil Company and Persian Gulf Petrochemical Industries Company will start work soon. NIOC has defined 30 projects to collect associated gas in the East Karoon region. Most of the projects are small-scale and are due to be ready by 2023.

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