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IOR Exclusive, January
2009 |
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Second Iran
Oil Refining Forum (IOR2) | Summit 2008 |
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President Mahmoud Ahmadinejad officially
inaugurated the South Pars oil field’s phases 6, 7 and 8 in Assaluyeh, Bushehr
Province Oct. 21.
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Phases 6, 7 and 8 refinery is projected to produce
172,000 barrels of gas condensates, 4390 tons of liquid propane and
butane, and 370 million cubic meters of ethane gas daily to be fed to
Assaluyeh petrochemical units. |
Oil Minister Gholamhossein Nozari,
National Iranian Oil Company Managing Director Seyfollah Jashnsaz, Pars Oil
and Gas Company Managing Director Ali Vakili, as well as Norwegian, South
Korean, and Malaysian ambassadors to Iran and some high ranking officials of
the oil industry also attended the inaugural ceremony.
The mechanical components of the
gas-fire refinery for South Pars phases 6, 7 and 8 have been installed and the
refinery is now ready to go on stream.
Phases 6, 7 and 8 refinery is projected
to produce 172,000 barrels of gas condensates, 4390 tons of liquid propane and
butane, and 370 million cubic meters of ethane gas daily to be fed to
Assaluyeh petrochemical units. The extra 3.64 billion cubic meters of gas will
be injected into Aghajari oil wells.
South pars phases 9 and 10 will come on
stream in a few months, too. The 5 phases will add some 50 million cubic
meters to the country’s gas production capacity.
Ahmadinejad said inauguration of Phases
6, 7 and 8 of South Pars gas field is the “last nail in coffin” of enemies of
the Iranian nation. “Those thinking that they can impede movement of a great
nation by imposing financial restrictions see today that to their dismay,
different industrial, farming and scientific sectors in Iran are making great
progress.” Thanking Iranian experts involved in the project, President
Ahmadinejad congratulated the nation on “this great honor.” He said 56 percent
of the project has been carried out by Iranian technicians and with Iranian
resources, “which is another source of honor.” He added that the government is
ready to provide oil industry projects with financial support.
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The total management of the project
is the responsibility of Petropars which also oversees the management of
Statoil. |
The contract for the 6, 7 & 8 project
was awarded to Petropars as the general contractor and the Pars Oil and Gas
Company as the client in July 2000. The project is divided into onshore and
offshore sections. The onshore section is located in Assaluyeh in Bushehr
province and the offshore is 105 km in the Persian Gulf. Onshore activities
include site preparation and construction of the refinery, whereas the
offshore section consists of 3 appraisal wells (one for each phase), 27
development wells (9 for each phase) and the offshore facilities. NICO, a
subsidiary of National Iranian Oil Company is responsible for financing this
project.
In December 2002, Statoil, a Norwegian
company was awarded to be the operator of the offshore section for this
project with responsibilities including managing jacket, platform and topside
fabrications, sub-sea piping, single point mooring (SPM) and drilling of the
development wells.
The fabrication and installation of
jackets was awarded through an EPC contract to ISOICO, an Iranian company,
which started its activities in July 2002 and completed in January 2004.
Sadra an Iranian company was awarded the
Engineering, Procurement and Construction of topsides, jackets, flares,
intermediate-bridges, installation of 32” pipelines for a length of 105 km,
SPM and its connecting pipelines through an EPC contract. These activities
were performed on Sadra’s industrial island in Bushehr.
Site preparation for the refinery was
started on December 2001 and completed on December 2003 by Fater Kosaran
Jonoob and Abad Rahan Pars. This project consisted of over 15 million square
meters of soil work. The refinery project was awarded through an EPC contract
to the consortium of TIJD which include TOYO of Japan, IDRO of Iran, JGC of
Japan and Daelim of South Korea in May 2002.
The total management of the project is
the responsibility of Petropars which also oversees the management of Statoil.
|
Product |
Production Rate |
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Dry Sour Gas |
93.5 [MMSCMD] |
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Stabilized Condensate |
159,000 [B/D] |
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LPG |
4,452 [T/D] |
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Rich Ethane Gas |
9.5 [MMSCMD] |
Three 32” sub-sea pipelines transport
well stream fluids produced at each wellhead platform, 105 km to the onshore
refinery to produce the following products:
Project Achievements:
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Increasing oil production of Aghajari oil
field
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Exporting condensate and LPG
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Reducing the cost of executing
fundamental projects in comparison to other oil companies
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Knowledge sharing especially in the field
of Project Management, Engineering, Procurement, and Construction
disciplines
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Maximizing domestic capabilities
The SPIFON (South Pars Integrated Fiber
Optic Network) project was also awarded to Petropars in addition to the
original service contract of phases 6, 7 & 8. This project creates an
integrated system that connects phases 1 through 10 of the South Pars Gas
Field offshore platforms to the onshore by enabling data transmission,
management, monitoring and control through a sub-sea fiber optic cable (FOC)
wide area network (WAN) system. This project consists of 300 km of sub-sea
fiber optic cabling, 20 km of fiber optic cabling on land and over 3 km of
cabling on the offshore platforms and is capable of transferring data at rates
of 2.5 Gbps.
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The contract for the 6, 7 & 8
project was awarded to Petropars as the general contractor and the Pars
Oil and Gas Company as the client in July 2000. |
The Power Generation Plant Project for
the refinery of phases 6, 7 & 8 was awarded to Petropars on June 2005. The
joint venture of Hirbodan and Hico FZE was selected the contractor for this
project. The duration of this project is scheduled to take about 20 months.
Main items for this project consists of; four SGT-800 gas turbines, four
50-MVA transformers, three 2-Megawatt diesel generators, waste management
systems, control building, switch gear and electrical installations, Power
Distribution Control Systems and more.
Iran’s natural gas production from South
Pars gas field Phases 6, 7, 8, and 9 - all expected to be completed this fall
- could prevent another massive energy crisis in Iran this winter.
In the frigid 2007-08 winter, Iran
consumed a peak 21.2 bscfd of gas, while total production averaged 16.5 bscfd.
The shortage resulted in a massive reduction of gas reinjection into Iranian
oil fields and a supply cut to electric power plants, industrial projects, and
200,000 residential and commercial consumers. Iran also halted gas exports to
Turkey.
Although Iran agreed to increase its gas
imports from Turkmenistan in second-quarter 2008 to as much as 1.1 bscfd this
winter to decrease Iran’s gas deficit, it found Turkmenistan gas imports last
year to be unreliable. Turkmenistan stopped deliveries of 800 MMscfd of gas in
January when Iran’s gas shortage increased to maximum levels and then raised
the price of its gas to $4.90/MMbtu from the 2007 fixed price of $2.64/MMbtu.
In April, Iran agreed to pay the higher
price and renewed imports. Turkmenistan said that after 2009, its gas price
would be linked to oil in a new price formula.
Demand
Increasing: In an
attempt to control growing domestic gas demand and decrease subsidies for
high-volume end users, Iran raised domestic prices substantially, especially
for residential and commercial use, using a pricing mechanism based on
consumption that can elevate the price to nearly eight times the former base
price of 39¢/MMbtu. However, this mechanism has been unsuccessful in reducing
demand. The country is expected to experience strong gas demand growth of 7-8%
during 2008-20, FACTS Global Energy forecast.
Accelerating demand in Iran is beyond
National Iranian Oil Co.’s control “because of a disconnect between downstream
and upstream activities in Iran,” FACTS reported. “[National Iranian Gas Co.],
which controls Iran’s downstream development, is separate from NIOC and has
different planning views. The development of the downstream section has always
been faster than upstream activities, and gas shortages may not be surprising,
especially in peak winter demand.”
NIGC estimates that a cold 2008-09
winter could raise domestic gas consumption to a peak of 24.7 bscfd, according
to the FACTS report. Based on NIOC official statistics, the country’s maximum
total gas production will be 19 bscfd at yearend. This could result in a
repeat of last winter’s gas shortage and supply crisis - although it could be
more moderate than that of early 2008 because the new South Pars phases
completion.
In 2007 NIOC subsidiary National Iranian
South Oil Co. (NISOC) supplied 65% of Iran’s gas production. Although it
expects to increase production by an additional 0.9 bscfd of gas this year by
developing Tange Bijar gas field and drilling more wells in Nar, Kangan, Homa,
Shanul, Varavi, or Tabnak gas fields, the gas from South Pars Phases 9 and 10
will be urgently needed to prevent “a massive energy crisis” this winter,
FACTS reported.
Phases 9 and 10:
Development of Phases 9 and 10 of the South Pars gas field development, which
would release 2 bscfd of gas to the domestic market, was nearing completion in
September, and gas is expected to flow from Phase 9 this month, with Phase 10
flow expected in November.
Phases 6-8:
Although South Pars Phases 6-8 will produce another 3.6 bscfd of gas, 152,000
b/d of condensate, and 1.6 million tons/year of LPG, the gas is scheduled to
be delivered via a 512-km, 56-in. pipeline to Aghajari oil field in Khuzestan
Province for reinjection. Phase 6 was scheduled for completion this summer,
and gas is expected to flow from Phases 7 and 8 late this year and early 2009.
Phase 12:
This phase, which will produce 3 bscfd of gas and 110,000 b/d of condensate,
will not be completed until late 2012-early 2013. About 1 bscfd of gas from
Phase 12 has been allocated for Iran’s domestic market.
Phase 13:
Although Phases 13 and 14 formerly were allocated to Iran’s LNG project, Royal
Dutch Shell PLC and Repsol YPF SA have delayed a final investment decision
(FID) on participating in the Persian LNG project, thus delaying it.
Phases 15 and
16: NIOC signed a
contract with a consortium of Khatam Al Anbia Construction Headquarters of
Iran, the Iranian Offshore Engineering & Construction Co., Saaf, and Iran
Shipbuilding & Offshore Industries Complex Co. to produce 2 bscfd of gas and
80,000 b/d of condensate from South Pars in Phases 15 and 16.
However, the EPC contractor will install
the offshore platforms in the Phase 13 areas instead of the area of Phases 15
and 16, and Phases 14-16 will be considered for the Persian LNG project.
Phases 17 and 18: NIOC and National
Iranian Drilling Co. recently signed a contract valued at more than $1 billion
for drilling 27 wells in Phases 17 and 18, which are intended to produce 2
bscfd of gas and 80,000 b/d of condensate. They are expected to be completed
in 2013-14. |
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CURRENT ISSUE |
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IOR Exclusive,
January 2009 |
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