Iran Outdoing Co-Owners of Joint Fields
Iran’s petroleumminister, Bijan Zangeneh, said in a televised interview that Iran had been outperforming its neighbors in terms of recovery from oil and gas fields it shares with them.
“We share fields with Iraq, Saudi Arabia, Qatar, the United Arab Emirates and Turkmenistan. The largest of these joint fields are located in South Pars and West Karoun,” he said.
Zangeneh said Iran was not ahead of co-owners in recovery from joint fields until several years ago, “but today we are ahead in daily gas production from South Pars and oil recovery from West Karoun fields.”
Iran shares the giant South Pars gas field with Qatar.
The minister also touched on the agreements signed for the development of fields located in western Iran, saying: “We’ve already been active in the Azar field and we have signed agreements with the Russians for developing several fields.”
Zangeneh said Iran also shared fields, including Forouzan, with Saudi Arabia. He added: “The bulk of this field lies in the territory of Saudi Arabia, but Iran is also recovering [from this field]. Renovation plans are under way in this field.”
The minister said: “We have not made any recovery from Farzad A and Farzad B, because we have been waiting for the Indians decision. But we hope the situation of these fields will be finalized this year.”
Zangeneh expressed hope that the fate of all joint fields would be decided upon before the current administration bows out.
The minister touched on the offshore South Pars gas field, saying: “Of the 27 phases of this field, the operation of refinery of the onshore sector and the offshore sector of 25 phases is over, and the operation of offshore sector will be over for all 27 phases early next [calendar] year to bring gas production from this joint field to about 800 mcm/d.”
Zangeneh expressed hope that work would get under way in SP11.
Gasoline Output at 115ml/d
Zangeneh said effective measures had been taken with regard to improving gasoline quantity and quality in Iran.
He said Iran was producing Euro-4 gasoline, which was not available in the country in 2012. Zangeneh said Iran brought its Euro-grade gasoline production to 76 ml/d in 2018 to be distributed in megacities.
The minister said: “Our gasoline production totals 115 ml/d.”
He added that Iran’s gasoline production reached 111 ml/d in the first summer month and 112 ml/d in the second summer month this year.
Zangeneh said Iran was producing more than 11 ml/d in excess. “We are storing this excess production and we have also started gasoline exports,” he said.
He also said Iran was producing 125 ml/d of gasoil.
Zangeneh said: “I’ve been told that in terms of gasoline production and in refining capacity, we are the first among OPEC member states, but unfortunately in oil production we come third among OPEC members.”
He added: “We were once the second OPEC producer.”
Zangeneh gave a positive assessment of gasoline production in Iran, “but we have numerous plans to upgrade the gasoline quality at Isfahan, Tehran and Abadan refineries. Implementation of these projects would improve the quality of gasoline in the refineries. However, currently high-quality gasoline is being produced in big cities.”
Trump’s ‘Crime’
Zangeneh expressed regret that US sanctions were hinderng the purchase of some widely needed equipment for improving environmental conditions.
He said: "In Assaluyeh, we need some modern equipment to improve the environment, but this equipment was hit by US sanctions and that is one of crimes committed by [US President Donald] Trump."
He added: "For instance, we should have expansionary turbines in order to separate ethane in desulfurization and heavy gas molecule separation units causing pollution or flares where gas is burnt, we cannot purchase equipment due to the problems caused by the Americans, but this delay is a sin and crime blamed on them."
Zangeneh touched on the latest measures undertaken for no-flaring, saying: "We have two groups of flare gas: One belongs to South Pars that can be turned off when we receive equipment; the other group needs NGL or liquefied gas units."
He said that NGL 3100 in Ilam Province, NGL Kharg, NGL 3200 in West Karoun and a refinery-size unit near Behbahan are fed with flare gas.
He added: "The flare gas is treated and separated to be either used as petrochemical feed or be fed into national gas network."
The minister said flares will be turned off within two years.
Petchem Gross Output Set to Rise
Zangeneh said Iran's petrochemical output was valued at $1 billion in 1997, butthanks to what the then reformist administration did mainly in the South Pars gas field,it increased.
"For the first time we launched gas-based and condensate-based petrochemical facilities and then the construction of numerous petrochemical plants began. Some were launched at that time and some others became operational later," he said.
Zangeneh said: "In 2013, we had reached $20 billion in terms of petrochemical production value. When we ran short of feedstock we produced less."
"During these years, new petrochemical plants have been built, while the previous petrochemical projects have been completed," he said.
Zangeneh said 12 petrochemical plants came online by March 2018, while a year later three other petrochemical projects became operational.
Zangeneh said the gross output of petrochemical plants would cross 100 million tonnes in 2021, up from 56 million tons recorded in 2013. In terms of value, he added, Iran's petrochemical production would double to $36 billion.
"In other words, we will see a 50% increase in the value, which would be the second petrochemical jump," he said.
Zangeneh said: "We reached $18 billion in our first jump and our second jump will bring us to $36 billion. The third jump will bring our production to 150 million tonnes, which would mainly include olefin or plastic production. That is a major development under way in the petrochemical industry."
$6bn Petchem Feedstock Annually
Zangeneh said the petrochemical value chain will be completed in Iran when downstream petrochemical projects are operated. "We are in good conditions from this standpoint. We are holding Iran Plastin September. Future demand and products for investment would be put on display there."
Zangeneh said petrochemical plants spent about $6 billion on feedstock every year.
"We have no other industry whose downstream sector would spend $6 billion on feedstock to be converted into other products because when there is sufficient capacity they would not buy more feedstock due to lack of market."
The minister gave a positive assessment of downstream petrochemical production in Iran, saying: "In the meetings I had with upstream petrochemical producers, they showed interest in domestic supply because of competitive price. But some of our products are not consumed domestically too much. For instance, 2 to 2.2 million tonnes a year urea fertilizer is used on farmlands and there is still enough of it."
He added: "That is while we are producing more than 6 million tonnes of urea fertilizer or metanol, and domestic consumption is very low. Domestic production of propylene is also low and its production is set to rise in third jump."
No Raw Sales
Zangeneh said the policy of not selling raw materials would not be limited to petrochemical plants. He said it would also involve refineries.
Regarding conversion of crude oil to products of high value-added, he said: "The Persian Gulf Star gas condensate refinery was designed with a nominal capacity of 360,000 b/d, but our colleagues took the initiative to add 120,000 b/d to the treatment capacity in phase 4. The refinery was initially designed to have three 120,000-b/d phases."
Zangeneh said the completion of phase 4 which would cost $70 million to $80 million a day, would bring the refinery's capacity to 480,000 b/d.
"Currently, the daily refining capacity of the Persian Gulf Star gas condensate refinery is 420,000 b/d. It means half of job has been done," he said.
No Word on Oil Exports
Pressed by TV host to provide figures about Iran's oil exports following US sanctions, Zangeneh said: "Due to the necessity of securing national interests I refuse to speak about figures related to oil and even petroleum product exports."
Asked about OPEC members' production capacity, he said: "Global oil markets are still oversupplied. That is due to the US's high and unpredictable production, which could not be predicted even one