Persian Year Ends on Positive Note

Ali Forouzandeh

Director General of Public Relations

The Persian year is coming to an end with positive developments for Iran’s petroleum industry. The current Iranian calendar year started with good news announced by Minister of Petroleum Javad Owji about record oil exports and revenue against the backdrop of sanctions. And now the year ends with news of inauguration of the refinery of Phase 14 of the giant South Pars gas field. The SP14 refinery is the last remaining onshore refinery in the gigantic gas reservoir which Iran shares with neighboring Qatar. Now the only development phase in South Pars, which remains to be completed, is SP11. Planned to become operational next calendar year, SP11 would add 56 mcm/d to the South Pars output.

The South Pars gas production capacity currently stands at 705 mcm/d. Iran hit a record 1 bcm gas output this year.

Investment in the onshore section of SP14 is estimated at $2.7 billion. Operation of SP14 would help feed over 50 mcm/d of sweet gas into national trunkline. SP14 would also supply 75 tb/d of gas condensate.

Another key point is that more than 75% of equipment used in the SP14 refinery has been supplied by local manufacturers. Under the 13th administration, knowledge-based companies have been engaged with 550 companies cooperating in the upstream and downstream sector.

More key projects are hoped to come online in the coming calendar year(starting on 21 March 2023) by reliance on Iranian engineers and manufacturers.

$3.4bn Projects Inaugurated in Assaluyeh

President Ebrahim Raeesi and Minister of Petroleum Javad Owji oversaw inauguration of oil projects worth $3.4 billion in Assaluyeh. Chief among them were the refinery of Phase 14 of the giant South Pars gas field, the Pars Glycol Petrochemical Plant and 9 petrochemical storage tanks. 

Raeesi said operation of the SP14 refinery had materialized by reliance on local knowhow and technical savvy and Iranian engineers without contribution of foreign companies. He added: “Starting up this project is the realization of the slogan ‘We Can’.” Minister Owji also said that SP14 refinery products would be worth $3.5 billion per annum.

With gas find in South Pars, Assaluyeh has become a major petroleum industry zone in Iran. Since 2000s, $150 billion has been invested in South Pars, Kangan and Assaluyeh. Meantime, 2.3 tcm of gas has been totally recovered from South Pars, valued at $414 billion.

Currently 21 petrochemical plants are operating in the Pars Special Economic Energy Zone (PSEEZ), fed by South Pars, supplying 39 million tonnes of products a year.

Gas Output at 1bcm/d

The SP14 refinery is the last refinery in the South Pars field. The only undeveloped phase is SP11 which would add 56 mcm/d to the field’s output. SP11 is expected to start producing gas next calendar year (starting on 21 March 2023).

Minister Owji said: “The South Pars gas production capacity currently stands at 705 mcm/d. This [calendar] year we managed to reach a record 1 bcm/d of gas production from all gas fields in Iran.”

He said $2.7 billion had been invested in the onshore sector of SP14, adding: “With the implementation of SP Fourteen, 56 mcm/d of gas is recovered while more than 50 mcm/d of sweet gas would be fed into the Iran Gas Trunk line (IGAT). Furthermore, 75 kb/d of gas condensate is produced from this phase.”

Owji put at $3.5 billion the annual value of SP14 products, noting that full implementation of SP14 would provide 1 million tonnes of ethane and 1 million tonnes of LPG a year to feed petrochemical plants.

The minister said that more than 75% of equipment used in the SP14 refinery had been supplied by local manufacturers.

Touching on the 70% contribution of local manufacturers in oil and gas projects, he said: “In the 13th administration, we have tried to benefit from knowledge-based companies. A total of 550 knowledge-based companies are working in the upstream and downstream petroleum sectors.”

1.2 mcm Capacity Building

Another project that has become operational is the nine storage tanks in the second phase of Assaluyeh Petrochemical Green Tanks Project with a storage capacity of 414,000 cubic meters of petrochemical products with an investment of more than $95 million. That would bring Iranian petrochemical storage capacity in PSEEZ to 1.2 mcm with more than $620 million investment. The project would bring to 48 the number of storage tanks in Assaluyeh’s petrochemical plants.

Mohammad Reza Yazdani, CEO ofAssaluyeh Petrochemical Green Tanks Co. (APGT), described the project as the largest petrochemical storage project, saying: “The availability of enough storage tanks for products ensures manufacturing companies that in case of any disruption in loading and exports they can continue storing products in green tanks.”

48 Tanks in 3 Phases

The first phase of petrochemical storage tank capacity building in Assaluyeh came online in 2019 with 13 storage tanks holding a total capacity of 370,000 cubic meters. In the second phase, 13 more tanks would be built with a total capacity of 568,000 cubic meters. Given the output of petrochemical companies in Assaluyeh, 9 tanks came online in the second phase with a capacity of 414,000 cubic meters, including 6 storage facilities for methanol and 3 storage facilities for ethylene glycol products. The remaining four tanks would become operational next calendar year.

Investment in the first and second phases totaled $350 million. The second phase involves 22 storage tanks with a capacity of 275,000 cubic meters.  

Domestic Potential

Yazdani said APGT had, since 2015, been providing exclusive storage services for petrochemical products supplied by the second petrochemical phase of PSEEZ, which are destined for exports. Methanol, propane, butane, various products of ethylene glycol, light naphtha, ethylene, butadiene, styrene monomer, propylene, normal and isobutanol and 2-EH are others stored by APGT at varying volumes ranging from 6,000 to 720,000 cubic meters.

Meantime, $350 million has been invested in building 22 storage tanks (phases 1 and 2) along with communications routes and infrastructure installations. The investment in APGT is borne entirely by Shasta Trading Investment Co., the proprietor of the project.

Yazdani said more than 80% of commodities and equipment in this project had been provided by local manufacturers and suppliers. He said that engagement of local knowledge-based companies cut project costs by 30% in the newly-built 9 storage tanks.

Tehran, Beijing Sign 20 Documents

Iran, Reliable Partner for World Energy Supply

The Iranian president, Ebrahim Raeesi, visited China at the head of a high-ranking delegation at the invitation of his Chinese counterpart Xi Jinping in mid-February. Minister of Petroleum Javad Owji was accompanying the president. During the three-day visit, 20 documents of cooperation were signed between the two nations in various sectors. Raeesi highlighted Iran’s huge oil and gas reserves, saying: “Iran-China partnership in maintaining energy security can help establish peace and bring about development at the regional and global levels, not to mention guarantee shared interests.”

Energy Security

In a meeting with Xi, Raeesi laid emphasis on the necessity of expansion of ties between the two countries in the economic, scientific, technological and cultural sectors. He said that implementation of China-Iran Strategic Partnership Plan (CISPP) would be a key step towards peace and stability in the region.

He said that reciprocal visits by political and economic delegations were instrumental in expanding ties, adding: “The Islamic Republic of Iran is determined to broaden ties [with China] based on mutual respect.”

The Iranian president described Iran-China ties as progressive, adding: “However, what has so far been done with regard to development of bilateral ties is far from planned. Therefore, longer steps need to be undertaken to make up for delays.”

Raeesi voiced Iran’s readiness to guarantee energy supply security, saying: “Iran will, in the long-term and in times of crisis for energy supply security, remain a reliable partner for independent nations.”

Corporate Cooperation

During the Raeesi-Xi meeting, delegates from 10 Chinese firms and a number of Iranian companies exchanged views about expansion of Iran-China ties.

The president said: “In light of the agreements made during this visit, companies in both nations can take longer steps to develop cooperation in various sectors.”

Raeesi touched on Iran’s unique economic and geostrategic potential, specifically its key role in trading commodities with Central Asia, the Caucasus and Europe. “Chinese companies may benefit from these capacities for the exchange of commodities and also for investment.”

He welcomed the activity of Chinese firms in investment and transfer of technology, saying: “China’s advancements in modern technologies alongside development and progress of knowledge-based companies in Iran have provided necessary ground for cooperation.”

He said that Iran and China could expand their already deep-seated ties through energy export, exchange of products, exchange of students, interaction between researchers and implementation of the Belt and Road Initiative.

Investment in Iran

China’s president said implementation of CISPP would help deepen ties between Tehran and Beijing. He said his country was firmly determined to improve ties with Iran.

Xi said his government would support Chinese companies willing to invest in Iran. “The Chinese government is fully ready to expand cooperation with Iran in trade, transit and culture,” he said.

Renewables Share

In a joint statement, Iran and China called for the accelerated implementation of CISPP and expansion of cooperation in trade, agriculture, industrial, renewables and infrastructure sectors among others.

The two sides agreed on holding the 18th Iran-China Joint Economic Committee in Tehran this year.

The Chinese side appreciated Iran’s active participation in China’s international fairs, saying it remained open to Iranian companies’ attendance in future events.

China also expressed its willingness for contribution to the production of high-quality products in Iran with a view to guaranteeing sustainable trade growth and expanding exports to China. Iran offered its gratitude to China for having established the “Green Channel” to export Iranian agro food products to China.

Tehran and Beijing also agreed to communicate further in order to expand cooperation in e-commerce.

Iran and China agreed on upgrading capacities for the purpose of increasing the share of renewables in Iran, particularly in photovoltaic electricity generation.

The Iranian side warmly welcomed China’s Road and Belt Initiative, saying it would offer its support for the project.

NIOC Talks

Ever since the Raeesi administration took office, National Iranian Oil Company (NIOC) has held talks with Chinese companies.

Fereidoun Kord Zangeneh, NIOC director of investment and business, has said the 13th administration considered Russia and China as “strategic partners” when it comes to investment in Iran’s oil fields.

“We have held regular talks with China’s Sinopec about the second phase of development of the Yadavaran field for a $3 billion buyback deal, which resulted in the finalization of technical agreements and issuance of permits. Chinese companies have never officially pulled out of Iran,” he said.

“Notwithstanding sanctions, NIOC, following CISPP, continues to negotiate with public and private companies in China for the development of the Yadavaran field and other joint fields in Iran,” he added.

Yadavaran 2nd Phase

Kord Zangeneh recalled that the first phase of development of the Yadavaran oil field came online by Sinopec in 2016 with an output capacity of 110,000 b/d. “Sinopec was expected to operate the second phase too, but the then minister of petroleum suspended the talks. Therefore, over the past year, NIOC has held regular talks with Chinese companies for the development of oil and gas fields.”

He mentioned Sinopec had never said it would not cooperate in the development of Yadavaran, adding: “The NIOC team negotiating with Sinopec is looking for new approaches for this company’s investment in the Yadavaran field.”

He said that Yadavaran was one of the NIOC’s priority projects, adding: “Early production from Yadavaran is in line with China’s plan. Some of my colleagues in subsidiary companies have had talks with the Chinese side. But everything is coordinated by NIOC because confidential talks are under way between the two companies.”

He said that integrating development of the Azadegan field, as well as development of jointly-owned oil fields with Iraq was among the topics of talks with Sinopec.

“Now that partners in the consortium to develop this field have been determined, NIOC, as the client, has called on Sinopec to be involved as investor in this field,” said Kord Zangeneh.

Financing LNG

Kord Zangeneh said NIOC was in talks to benefit from China-Iran credit line for developing joint oil fields. “During our latest talks with one of China’s major companies, it agreed to invest in Iran’s LNG at a 3/1 share.”

He also said that oil-for-goods scheme was being discussed by NIOC and Chinese companies.

“In order to purchase goods inside or outside of the country, NIOC standards need to be respected. If we arrive at our desired results in the talks, we will definitely benefit from this potential to attract investment in the petroleum industry,” said Kord Zangeneh.

Investment in Mahshahr

Following Raeesi’s visit to China, a Chinese delegation visited the Mahshahr Special Economic Petrochemical Zone to examine infrastructure for a possible $50 million investment in a sulfur carbon production plant. The visit was done in line with CISPP provisions.

Mahshahr is Iran’s first petrochemical hub whose infrastructure is attractive to investors.

Maroun Oil/Gas Output to Rise 5%

Mahnaz Mohammad-Qoli

Maroun Oil and Gas Production Company (MOGPC) is expected to see its oil and gas production grow 5% as new modifications are under way in its pipelines. Qobad Nasseri, CEO of MOGPC, told “Iran Petroleum” that plans were also under way to end the flaring of 40 mcf/d of associated petroleum gas.

The following is the full text of the interview Nasseri gave to “Iran Petroleum”:

How isMOGPC planning to enhance its oil and gas production capacity?

MOGPC which isa major subsidiary of National Iranian South Oil Company (NISOC) is tasked with production, processing and transfer of oil, gas and condensate from the large and complex fields of Maroun, Kupal and Shadegan. The company takes up added significance due to the complex Maroun field which is among the major four oil fields in Iran. The main task assigned to operating companies is maximum efficient recovery (MER)of oil and gas and generation national wealth for the country, and in this regard, all relevant parties are required to cooperate. The output hike plan is always affected by well conditions, especially the wells that are already operational and need remedial measures such as perforation, blocking and acidizing. The wells that are no longer productive due to pressure fall-off or downholeobstacles and require workover are also listed and introduced for necessary planning. In addition, carrying out processing modifications in operating units and pipelinesare among the important strategies of this company to increase production.

How much can MOGPC increase its output?

Once all those measures carried out, the output would increase about 5%, not to mention the stability of production.

What has MOGPC done to increase output from low-yield wells?

Revival of low-yield oil wells has recently been placed on the agenda of National Iranian Oil Company (NIOC). In the meantime, a number of MOGPC wells have been introduced as low-yield ones, whose numbers will be announced after an expert review.

To what extent can domestic manufacturers supply necessary equipment and machinery to MOGPC?

Until a few years ago, supplying the required commodities was really considered a big challenge for operating companies.Although unjust sanctions and lack of support from foreign suppliers aimed topin down the oil industry, we neutralized these sanctions by relying on knowledge-based companies and domestic manufacturers and, of course, the technical knowhow of oil industry staff. Currently, we make almost everything we need inside the country with ideal quality.For instance, during the last 9 months, with 51 requests, we designed and manufactured 231 types of parts required for process machinery and industrial equipment. On the other hand, some time ago, the overhaul of two air compressors -Neuman & ESSER-located at gas compressor station of Bangestan Maruon3, were successfully carried out with the aim of production stability and self-reliance in the field of maintenance.Overhaulof the above-mentioned compressors is very important, because the process of transferring sour gas from the operation units combined with compression and dehumidification through the Bangestan facility and moving this sour gas for the sweetening process atthe GTP of subsidiary companies require compressed air to operate the instrumentation systems of these stations, which is provided by this type of air compressors.One of these compressors with a capacity of 800 cubic meters per hour and an output of 130 pounds per square inch (psi)for the first time was repaired after 20 years by local technicians using locally manufactured parts in five days, while the overhaul of the second air compressor was under way.

Would you please tells us about MOGPC’s performance in the overhaul of processing machinery?

The reparation of processing machinery and manufacturing of the equipment needed by this company are accelerated with the participation of domestic knowledge-based companies. The oil industry never waits for the technical know-how of foreigners. The experience of the past few years shows that knowledge-based companies have significant capabilities in the field of engineering and repair of complex processing machinery and can overcome a large part of the obstacles.In the basic repair of facilities and processing machinery below 4000 horsepower, we included 530 machines and equipment in the basic repair program of 2022, of which the basic repairs of 225 machines and equipment have been completed by the end of November this year. By March 2023, we will have also repaired the remaining 305 pieces of equipment.

Would you please tell us about MOGPC’s plan to improve crude oil quality, particularly from the standpoint of desalting?

Since MOGPC delivers a significant part of its produced crude oil as feedstock to the refining sector, considering the sensitivity of the refinery equipment from the same source is on the agenda, so maintaining the quality of crude oil has a special priority in terms of salt and water content, and we pay attention to it. Due to the conditions of the reservoirs that have caused dilapidation in the desalinationfacilities, the process of oil desalination has been intensified slightly, but with the definition of the project to eliminate the defects of the desalination units in 28 reservoirs, the capacity of the desalinationunits will soon increase and the stability of the product quality will be improved. I would like to emphasize that the quality of the oil sent to the refinery sector is favorable and what was mentioned is a future-oriented plan for the sustainability of production.In desalinationUnit No. 5 of Maroun, 2 salt traps with new (membrane) technology are being set up, which is the first experience of using this type of salt trap in the Middle East. Advanced reverse osmosis technology has been used for desalting crude oil in the Industrial Complex No. 5 of this company with the aim of preventing production reduction and improving the quality of sweet oil. The reverse osmosis (RO) technology will be introduced in the production process for the first time by NIOC, because due to the increasing salinization of oil in the reservoirs and the increase of water associated with oil, the optimal separation of fine particles of water from the oil has become doubly important. Among the advantages of this technology, we may mention a significant reduction in water and electricity consumption and the absence of the need for suspension-breaking chemicals in the process of desalting of crude oil. In addition, the installation and use of this technology will increase the desalting capacity to 20 kb/d, which will have a significant impact on the stability of production and increase the quality of crude oil for use in domestic and export refining industries. RO is a physical process to separate dissolved minerals from a solution using a semipermeable membrane and pressure.

Does MOGPC have any plans to construct or renovate pipelines?

The pipelines are short and long vessels of the body that keep it alive and dynamic. Without maintenance, repair and updating of pipelines, it is not possible to transfer even a single drop of liquid.Projects such as the construction of a 30-inch crude oil transmission line from Maroun Industrial Complex No. 1 to Omidiyeh compressor station, replacement of gas transmission pipelines from Maroun Industrial Complex No. 6 to NGL 400 and NGL 500 to NGL 400, replacement of the Maroun gas injection station injection network, construction of 9 km 8-inch oil transmission line from Maroun Industrial Complex No. 6 to Maroun Industrial Complex No. 1, replacement of injection well waste lines with FBE coating, replacement of internal and external waste metal pipelines with non-metallic pipelines, construction of 34 km of 20-inch pipeline from Ahvaz Unit 2 to Maroun Industrial Complex No. 6 could be considered as the major current projects of the company in the field of pipelines.

How about environmental developments following flare gas gathering?

Perhaps this plan can be called our most important action in the direction of protecting the environment and protecting hydrocarbon resources because it is a new and efficient idea that solved a significant part of the concern of the organization regarding gas flaring. With the implementation of this plan, 20 mcf of excess gas from Maroun Industrial Complex No. 6 and 8 mcf of sour gas from Maroun Industrial Complex No. 3 will be collected daily. In addition, with the announcement of the readiness of the Iranian companies in charge of this project, we are ready to help them reduce gas flaring.During another project included in the plan of 28 tanks, sour gases from the separation stages of Industrial Complex No. 5 and sour gases from Maroun Industrial Complex No. 3 will be sent to the Bidboland Gas Refinery, which make the sky clear. On the other hand, in order to maintain the safety and environment around the company’s facilities, we put the project of securing 16 kilometers of underground pipelines of 6 inches of main liquids and 14 inches of main gas of the company’s gas pressure boosting stations, which was completed on time. The mentioned line sends 40 mcf/d gas from Maroun 2 (Aghajari) and Maroun 5 complexes to NGL 700 and 800. Due to the proximity of this line to the Jarrahi River and a number of villages, its security was of great importance so that there would be no threat to the surrounding community.

Local Firm Builds Tanker Rail Hose

An Iranian knowledge-based company has built tanker rail hoses and first-off FPSO for the first time in the country to serve Iranian Offshore Oil Company (IOOC). They are used in ship-to-ship crude oil exports

Two tanker rail hoses and two first-off FPSO have been manufactured by Tehran Rubber Parts Company. 

One tanker rail hose has been delivered to Kish to be tested for loading oil for exports.

Rail tanker hoses are strategic in the oil production chain. They are highly significant in oil exports. Iran used to buy these hoses from Dunlop and Yokohama at high prices. But given restrictions, it was necessary for the manufacturing such strategic commodity inside the country.

4 Petchem, Integrated Projects Due in 2 Years

Chairman of Oil Industry Pension Fund (OIPF) Abdol-Hossein Bayat has said that Soroush and Negin petrochemical plants and the Kangan olefin project would come on-stream by March next year.

He said that all OIPF-related projects, particularly the Kangan integrated petrochemical/refining plant, were in good progress.

He said that one major reason for the success and tangible progress in the Kangan projects was that many companies specializing in engineering and design were located in the vicinity.

“Engineering and designing services in this sector are entirely handled by OIPF subsidiaries. We can now export such services,” said Bayat.

He specifically touched on the Alay Mahestan petrochemical project, saying it would come online on schedule in 2025. He said it was listed as a prioritized project.

Referring to the Iran LNG project, he said: “After a long hiatus, contractors have been chosen and agreements have been signed with them and MC is being selected. Plans have been adopted for the first phase of this project.”

Iran Gas Output Capacity to Rise 50% by 2029

CEO of National Iranian Oil Company (NIOC) Mohsen Khojasteh-Mehr has said Iran would see its gas production capacity jump to 1.5 bcm/d from the current 1 bcm/d by 2029.

He made the remarks while visiting the Aghar, Dalan and Dey fields and the Farashband gas refinery.

He said that one-third of Iran’s gas reserves lies in Fars Province and is administered by Iran Central Oil Fields Company (ICOFC).

“By investing $3.6 billion in 13 gas fields and two gas compressor projects, we plan an increase of 142 mcm/d in gas production,” said Khojasteh-Mehr.

He said NIOC was ready to raise output from the Aghar and Dey fields by 7 mcm/d next calendar year. “By completing development of the Aghar and Dey gas fields, a total of 25 mcm/d of gas would be added to national capacity by March 2025.”

“The Farashband gas refinery is running at full capacity (45 mcm/d), but it is planned to see its output reach 70 mcm/d in the second phase with an investment of about $177 million,” Khojasteh-Mehr said.

“Over eight years, Iran’s gas production capacity will increase from 1 bcm/d to 1.5 bcm/d, which would require $70 billion in investment.

$5.2bn Invested in SP14

CEO of Pars Oil and Gas Company (POGC) Mohammad Hossein Motejalli has said more than 70% of the design and manufacturing of Phase 14 of the giant South Pars gas field is local.

He said the SP14 refinery was the “most Iranian” refinery in Iran.

Motejalli said SP14 had four production platforms, adding: “SP14 is the last onshore refinery in the South Pars gas field, whose platforms are located 105 kilometers off Kangan. This phase has 44 wells from where gas is delivered to the SP14 refinery by two 210-km-long subsea pipelines.”

Two subsea pipelines, measuring 18 km long, connect the main platform to the satellite platforms, he said, adding: “The 4.5-inch pipeline carries glycol from land to the platforms. This pipeline is 210 km long, built entirely under the sea. The onshore refinery was designed in three years with a treatment capacity of 56 mcm/d.”

Motejalli touched on investment in this project, putting it at $5.2 billion, $2.7 billion of which having been earmarked for the onshore refinery construction.

Referring to the production chain, he said: “After gas is recovered from the wells and delivered to the refineries, the first product is 50 mcm/d of ethane, used as domestic gas and feedstock for petrochemical plants.”

Ministry, Knowledge-Based Firms Sign Deals

Vahid Reza Zeidifard, deputy minister of petroleum for engineering, research and technology, has announced agreements signed between the Ministry of Petroleum and knowledge-based companies.

“The Ministry of Petroleum has signed agreements worth IRR 31 trillion plus $95 million with knowledge-based companies for the domestic manufacturing of petroleum industry equipment,” he said.

“LNG projects constitute a long drawn-out issue in the Ministry of Petroleum. We have been following up on it for years, but we are yet to reach a conclusion. However, we hope to be able to acquire gas to LNG conversion technology,” he added.

“The 13th administration and the Ministry of Petroleum eye exporting technical and engineering services and a specialized working group has been established for this purpose. We are fully ready to export technical and engineering services at the highest quality to our neighbors,” said Zeidifard.

Touching on the impact of knowledge-based companies’ involvement in the domestic manufacturing of petroleum industry equipment, he said that 200 items of oil commodities would no longer be authorized to be imported due to their local manufacturing.

MOU for 1st Mini-LNG Plant in Iran

National Iranian South Oil Company (NISOC) and Oil Industry Pension Fund (OIPF) have signed a memorandum of understanding (MOU) for the construction of the first mini-LNG plant in Iran.

NISOC is the administrator of the project, while OIPF would be the main investor.

Ali Reza Daneshi, CEO of NISOC, underscored the significance of the MOU for a small-scale liquefied natural gas production, adding the project was also part of a safety plan.

He explained that the city of Ahvaz lies over an oil field, which is creating hazardous conditions for thecitizens.

“One key solution in making hazardous gas products safer is liquefaction or LNG,” he said. He added that LNG production would reduce the volume of gas, facilitate its storage while reducing its hazards.

“In this project, hazardous gas will be gathered in West Karoun before methane is separated from it. Then, advanced technology would help liquefy gas be stored in special canisters,” he said.

Daneshi said it would partly compensate for the country’s backwardness in the petroleum products value chain. “It is highly valuable because it can be implemented in low-risk areas, too.” he added.

Daneshi also said that three agreements had been made for the supply of basic equipment in the upstream sector. He said the agreements involved 27 items of k-mill for drilling, wellhead equipment including 40 tubing hangers and one gate valve.

Drilling Equipment Homegrown at 80%

A deputy CEO ofNational Iranian Drilling Company (NIDC) has said that the company owns 73 drilling rigs that are operating in different regions of the country.

Mehran Makvandi said the rigs were operating both offshore and onshore.

“Currently, around 80% of the parts needed by the drilling industry are produced by local manufacturers, and we hope to be able to supply the rest of the requirements with the help of domestic companies as well,” he added.

“NIDC is a leading company in supporting local manufacturers. Due to such partnership, more than 22,000 items of locally manufactured equipment have been used in various sectors,” he said.

Makvandi said based on National Iranian Oil Company (NIOC)’s development plans, overhaul of a number of drilling equipment is under way.

RamtinTahmasbipour, NIDC director of logistics and commodities, said more than IRR 4,500 billion order of commodities and equipment was placed with Iranian manufacturers and knowledge-based companies.  

He said the commodities included 850 items for which 340 MOUs were signed. He added that 50% of the items had already been delivered.

He said that the main strategic equipment used in the drilling industry were top drive, blowout preventer for the safety of rigs, butterfly valves, fluid pump parts, pump module, drilling tongs, oils, lubricants and cables.

230 bcm of Natural Gas Transferred

CEO of Iranian Gas Transmission Company (IGTC) Gholam Abbas Hosseini has said over 230 bcm of natural gas was transferred since the beginning of the current calendar year.

“IGTC is tasked with protecting, maintaining and steering 38,580 km of pipeline and 89 gas compressor stations. Timely reparation of pipelines and preparation of installations according to the dispatching schedule set by National Iranian Gas Company (NIGC) are among the major operational plans,” said Hosseini.

Referring to the transmission of 230 bcm of gas to the national trunkline, he said the highest intraday record hit 855 mcm/d.

Touching on measures conducted for gas transmission stability in the current calendar year, he said that turbines, electroengines and compressors underwent necessary reparation before December.

Hosseini said overhaul of the Iran Gas Trunkline 3 (IGAT-3), IGAT-5 and Sarakhs-Neka pipeline, connecting installations to IGAT-10 and preparation for commissioning and operation are among the outstanding measures.

“Since the beginning of the current calendar year, 3,013 km of smart pigging, 3,300 km of cleaning pigging, 39,366 km of leak detection, 1,911 meters of pipe replacement, and 37,348 square meters of coating replacement have been conducted,” he said.

Hosseini also said that more than 750 items of commodities required by IGTC had been supplied by domestic manufacturers.

He said IGTC had empowered local manufacturing companies as part of its self-sufficiency plan in the supply of necessary parts.

Iran Ready to Build Refinery in Turkmenistan

Iran is ready to build refinery in Turkmenistan, a deputy minister of petroleum has said. Vahid Reza Zeidifard, deputy minister for engineering, research and technology, said Iran was also ready to develop oil and gas fields in Turkmenistan besides supplying high-quality equipment to that country.

He also invited Turkmen oil and gas officials to visit Iran to get to know about Iran’s petroleum industry achievements.

Zeidifard was heading an Iranian delegation to Turkmenistan’s Ashgabat at Iran’s 14th Exclusive Fair. On the second day of the exhibition, Iranian delegates met with managers of Turkmengaz, Türkmennebitand Turkmenhimiya.

Zeidifard spoke about the capabilities of Iranian companies in the petroleum industry, while laying emphasis on cooperation between the two nations.

He said more than 70% of equipment used in oil projects in Iran was homegrown, calling for cooperation in the supply of Turkmenistan’s oil industry needs.

A deputy CEO of Turkmengaz welcomed the presence of Iranian companies in the exhibition and expressed hope for better cooperation between the two brotherly and friendly nations.

A deputy CEO of Türkmennebit said: “There is no doubt about the capacities of Iran’s petroleum industry and we would be happy to see more Iranian companies engaged in Turkmenistan in the near future.”

Turkmenhimiya’s deputy CEO also said: “Good proposals have been presented and we are willing to cooperate in favor of both countries.”

South Pars Speeds Up LPG Exports

The chief engineer at South Pars Gas Complex (SPGC) has said that arrangements were being envisaged for equipping an LPG jetty for National Iranian Gas Company (NIGC) at South Pars.

Mehdi ShafieiMotahar said that completion of this project would help accelerate LPG, propane and butane exports.

He said that a group of directors and experts from Iran Gas Engineering and Development Company (IGEDC) had reviewed arrangements for the project.

“A plan covering feasibility issues, equipment roadmap, building LPG pipelines and saving time for loading has been presented by the SPGC Directorate of Engineering,” he added.

“By expediting operations for equipping this export jetty, SPGC will see its strategic exports pick up speed in the near future to bring about economic prosperity for the country,” he said.

Ahmad Bahoush, CEO of SPGC, said more than 165.32 bcm of gas had been fed into national trunkline since the beginning of the current calendar year while more than 1.975 million tonnes of ethane had been produced by SPGC.

“During 45 days of winter, more than 25.841 bcm of gas was fed into national trunkline from SPGC refineries,” he said.

Noting that SPGC was supplying more than 75% of Iran’s gas needs, he said: “SPGC comes first in terms of using locally manufactured equipment provided by knowledge-based companies.”

“Another strategic product supplied by SPGC is ethane with a production capacity of 15,500 tonnes a day in the 13 refineries, which is delivered to petrochemical plants. Morvarid, Kavian and Jam petrochemical plants use ethane. SPGC has produced more than 1.975 million tonnes of ethane since the beginning of the current calendar year,” Bahoush said.

Oil Well Reclamation in Fars Province

Mahmoud Mir-Baqeri, technical director of Iranian Central Oil Fields Company (ICOFC), said an agreement had been signed for reclaiming an oil well in the southern Fars Province.

“An agreement was signed with PetroAzma Co. for the reclamation of Well No. 4 of the Saadatabad oil field within the framework of reclaiming closed and low-yielding wells,” he said.

Noting that ICOFC had presented a list of 25 low-yielding and closed wells to National Iranian Oil Company (NIOC) for reclamation, he said: “Technological firms presented their technical proposals to NIOC and the first agreement was signed.”

He said reclamation of the well was aimed at resolving the problem of extra gas production and enhancing oil output.

“Its technology is being used for the first time in Iran and could be applied to similar wells to significantly enhance the output,” said Mir-Baqeri

Mohammad EsmaeilKefayati, head of PetroPark, said: “The planned reclamation ofnon-operational and low-yielding wells has provided the opportunity for knowledge-based companies and scientific and technological centers to participate in the development and research of oil and gas fields. One of the characteristics of these companies is that they can handle a task by saving costs and time. Also, by achieving technical experience, these companies are provided with the opportunity to offer technical and engineering services in international arenas, which is a source of income for the country.”

Iran among Sponge Coke Technology Proprietors

Iran has joined the six countries possessing technical knowhow to produce sponge coke. Sponge coke production has started in the Bandar Abbas oil refinery after upgrading the quality of heavy products there.

Minister of Petroleum Javad Owji said: “This project has been implemented with a €2.2 billion investment. With its implementation, we have entered the fuel oil chain, not to mention the fact that the Bandar Abbas oil refinery will become the second refinery in the country to stop fuel oil supply.”

“Bandar Abbas oil refinery processes 350,000 b/d of products, 130,000 b/d of which is converted into fuel oil. In this project implemented using the technical knowhow of the Research Institute of Petroleum Industry (RIPI) and engagement of local contractors and manufacturers, 8,000 persons will be employed,” he said.

Owji said: “Hormuzgan Province is the country’s hub of refined petroleum products. With the construction of the Shahid Qassem Soleimani and Morvarid Makran refineries this province will see its refining capacity reach 1.8 mb/d.”

The minister noted that fuel oil, which is low value, would be transformed into more valuable products.

$8bn Projects

Owji said nearly $8 billion of upstream and downstream petroleum industry projects would come online by the end of the current calendar year.

He added that the refinery of Phase 14 of the giant South Pars gas field, worth $2.5 billion, the Isfahan refinery’s fuel quality upgrade, worth $800 million, NGL 3200 project, Abadan refinery capacity upgrade as well as urban and rural gas supply are among these projects.

The minister expressed hope that “Mehr Khalij Fars” refinery would come online with a capacity of 120 tb/d by March 2024. “By enhancing the refining capacity of Hormuzgan Province, implementation of Rafsanjan-Mashhad, more than 460 km of which lying in Hormuzgan Province, has started and is expected to come online by May 2023.”

He said that operation of this pipeline would put an end to the need for 1,500 oil tankers to ply roads daily. “This project would largely help prevent pollution, save fuel and reduce road accidents.”

He also said that the Minab-Sirik gas pipeline would be completed by Mars, adding that Jask represented good opportunities for investment in the oil, gas, refining and petrochemical sectors.

Light Oil Output up 200 tb/d

Minister Owji said Iran was exporting oil even under toughest ever sanctions, adding that the country’s oil and gas production had reached 3 mb/d and 1 bcm/d, respectively.

He said Iran added 200 tb/d to its light oil production in the current calendar year, adding: “We have many customers for our light crude oil, the grade which we do not have too much to supply.”

He touched on the activity of about 70 petrochemical plants in the country with a total capacity of 90 million tonnes a year and said Iran’s petrochemical exports were valued at $15 billion last calendar year.

“Venezuela’s oil production dropped from 4 mb/d to 250 tb/d as soon as it was sanctioned, but Iran has made significant progress in the oil and gas industry,” he said.

Refinery Modernization

Jalil Salari, CEO of National Iranian Oil Refining and Distribution Company (NIRODC), said upgrading the quality of fuel oil at Bandar Abbas oil refinery was a legal obligation which was fulfilled using local knowhow.

That, he said, would add about 10 million liter of petroleum products, including gasoil and solvents, to national output. “These products include 5 ml/d of gasoil, 4 ml/d of special products and about 1.5 ml/d of grade-2 and grade-3 oil.”

He said 30 tonnes an hour of coke was being produced by this project, adding: “I hope that we can modernize this refinery within three to four years, which would export more products in addition to supplying domestic needs.”

Sponge Coke Production

The project for upgrading the quality of heavy products of Bandar Abbas refinery has been implemented for coke production and reducing sulfur and fuel oil output. With an investment of $1,700 million, the project has led to the production of 300,000 tonnes a year of sponge coke. Delayed coker is being used for coke production.

The total investment for utilities and related installations, under an EPCF project, stands at €810 million, 75% of which is provided by the contractor and the rest from the annual margins of Bandar Abbas oil refinery.

The EPC project for building processing units with a focus on sponge coke and other products is estimated at €722.

The grade-2 and grade-3 oil production project is in the stage of selecting a contractor for the EPCF project. The initial investment for this project is estimated at €600 million.

Iran Excelling in Conventional, Unconventional Fields Study

Experts at Research Institute of Petroleum Industry (RIPI), which is the main center of research and exploration for gas hydrates in Iran, say that each cubic meter of gas hydrate generates as much thermal value as 164 cubic meters of gas. Common technologies used for recovery from these resources may be costlier than technologies used for recovering from conventional resources; however, the cost-effectiveness of gas hydrate recovery becomes known when conventional resources go on the decline. Touraj Behrouz, head of Upstream Industry Research and Development Division of RIPI, has said good achievements have been made in modelling, studies and lab activities in both conventional and conventional fields.

Studies on gas hydrate started more than a decade ago under the aegis of cooperation between RIPI and NIOC Directorate of Exploration. Along with leading companies and research institutes in the world, Iran has understood the significance of this issue.

Over recent years, Iran has achieved the technical know-how to produce various gas hydrate in a semi-continuous process, which is considered the first pilot project in the world with a unique single-stage production method, without needing water-hydrate separator systems and granulation systems. It has been successfully launched to produce semi-industrial scale hydrate. This pilot includes two pressurized semi-industrial reactors and equipped with cooling systems and advanced controllers and is also capable of producing various types of crushed gas hydrates with a high capacity of stored gas.

Based on the objectives set forth in the 7th National Development Plan, this technology would be used in the field of development and commercialization of kinetic inhibitors of gas hydrate, production and consumption of natural gas hydrate in demand response as an alternative fuel, application of hydrate technology in seawater desalination and fresh water supply to ports, removal of carbon dioxide and in enhanced oil recovery.

Over the past years, with the growth of technologies in the world, many countries have been able to commercialize the technical knowhowassociated oil and gas shales, and now, in light of the importance of gas in the world, many reputable companies are looking to commercialize the technical knowhow of gas hydrate. Fortunately, Iranian researchers started their research in the field of hydrate at the right time, and Iran could be considered one of the leading countries in the field of hydrate-related technologies.

Exploration of gas hydrate resources in the Gulf of Oman in Iran has been carried out in cooperation with Amir Kabir University of Technology and Tehran University’sTechnology Park to conduct seismic testing, and so far geological studies have been carried out and a 200-meter onshore catwalk wellhas been drilled to identify and explore gas hydrates in the coastal areas adjacent to the Gulf of Oman.

Investigation and verification of the relation between geological units, thermodynamic investigation of the possibility of formation of gas hydrate sources in the Gulf of Oman, projection of the type of gas in the gas hydrate network, conceptual seismic modeling and finally reprocessing of seismic data are among the other measures carried out in this regard. The hydrocarbon reserve of gas hydrates in the world is equivalent to 300 times conventional resources combined.

The project to study gas hydrates in the Gulf of Oman was successfully completed by RIPI in 2014. This project was unique in its kind and for the first time about unconventional deposits, of which gas hydrates are an example. Based on the estimates of gas hydrates in the Gulf of Oman, drilling a well in the deep waters of the Gulf of Oman in the coming years can help increase information about the resources in this area.

Meantime, oil shale exploration in Kavir Kuh and Qali Kuh has been completed, the Gulf of Oman gas hydrate exploration project will soon enter the second phase, and the gas shale exploration project is 80% complete. According to the director of exploration of National Iranian Oil Company (NIOC), hydrocarbon reserves are likely to exist in northeast, towards the Gorgan Plain and Kopet Dagh, when compared with northern areas. Meantime, in light of proven oil reserves in DashteMoghan, development activities should be put on the agenda for this area.

Risk Reduction

Behrouz, referring to the upstream value chain in the exploration, appraisal, development and production sectors, told “Iran Petroleum”: “We have already started activities in the fields of exploration, development and production, but in the field of evaluation, which has been started in the world in the last decade, this scientific center has entered the fields of studies, modeling and laboratory. Evaluation would help reduce risks associated with technical and investment decision-making in the country's oil and gas fields.”

“One of RIPI’s projects involves studying the Ahvaz oil field, which is the largest oil field in Iran. Other projects including the complex Rag Sefid, Bibi Hakimieh, Homa, Danan, Azadegan, Persian Gulf and Gulf of Oman gas hydrates, improved recovery, production from low-yielding wells, cementing, drilling mud, routine and special tests, reservoir fluid tests, and geochemical exploration are under way at this Division,” he added.

“Specifically in the large fields of Ahvaz, Rag Sefid and Bibi Hakimieh, we are looking for proposals to implement new technologies with a challenge-oriented technological approach,” he said.

Behrouz said RIPI provides a wide range of services including studies, modeling, lab service and drilling products to various companies, adding that the scenarios developed by RIPI are always presented to clients with an economic-technical approach.

Reclaiming Wells

Behrouz said an integrated assessment modeling (IAM) project had been carried out in one of the phases of the giant South Pars gas field for the purpose of improving operations and reducing costs. “Implementation of this project in this field would produce significant efficacy,” he added.

He recalled that RIPI has been a leading body in the reclamation of low-yielding and capped wells, adding he has already implemented one project in an oil field in southern Iran.“Due to the presence of nascent knowledge-based companies in reclaiming low-yielding oil wells, RIPI is ready to cooperate with stakeholders in this important issue,” he said.

Behrouz also enumerated other projects including cementing and drilling mud waste prevention in Belal, Aghajari, Danan, Pazanan, Maroun and Masjed Soleiman among other oil and gas fields in the country operated by RIPI.

He also said that RIPI has been involved in assessing unconventional reservoirs since several years ago with work having been done on shale gas, as well as gas hydratein Lorestan.

“Based on preliminary studies, significant gas hydrate is expected to be there in these reservoirs. In addition to continuing laboratory, modeling, studying and operational activities, we are trying to work in new upstream areas, such as digital core analysis, geophysical processing, smart well, and pilot design and modeling of enhanced oil recovery,” he said.

World Gas Needs $10.53tn by 2050

The Iranian Ministry of Petroleum’s Directorate of OPEC & Int’l Energy Fora has analyzed the latest edition of the Gas Exporting Countries Forum (GECF)’s 2050 Global Gas Outlook. Investment in natural gas is instrumental in stabilizing the global energy system because by 2050, the total investment needed to meet global gas demand would add up to $10.5 trillion. In a sector, whose annual production fall-off is estimated at 4-5%, lack of investment would mean a slump in supply and instead a spike in prices, which would subsequently bring about inflationary pressure and put a strain on livelihoods. That may blunt the willingness of citizens in developed nations to support governments backing energy transition and even make them resistant to any change. A revision of energy policies along with understanding the significance of investment in natural gas, as backup fuel for renewables and a factor of global development, would be a positive development for the future of human beings.

Fundamental Changes

The latest edition of the GECF’s Global Gas Outlook has been released against the backdrop of three years of serious and deep crises in the economic, energy, trade, and health, environmental and geopolitical sectors across the globe. Over the same period, the global energy system has experienced ups and downs due to the COVID-19 pandemic, economic recession, underinvestment and geopolitical tensions. These developments have brought about fundamental changes in investment, trade, market performance and agreement arrangements. In the face of big uncertainties and profound changes under the present circumstances, response to the energy enigma is extremely vital and decisive: How can one arrange for an energy system in the world to meet environmental objectives besides helping economic and social development?

In its outlook and with a view to elucidating the pivotal role of gas in the future of the world energy system, the GECF Secretariat has designed the two scenarios of “energy stability” and “accelerated energy decarbonization”, which would significantly contribute to the understanding of the significance of natural gas for both developed and developing nations in the long-term horizon.

Shift in Economic Power Balance

The GECF’s macro-scale paradigm, known as the global gas model serving as the tool for supporting analysis and make forecasts in drawing up the global gas outlook for the Forum, has been prepared based on demographic and economic growth forecasts by the United Nations and the International Monetary Fund (IMF). Furthermore, the GECF’s modelling experts have forecast oil, gas and carbon prices in the long-term.

The UN estimates the world population to reach 9.7 billion in 2050 from 7.9 billion recorded in 2021 with 90% of this demographic growth contributed by Asia-Pacific and Africa. A decline in population growth all across the globe, the ageing of population particularly in developed nations, urbanization growth and increased migration are said to be the most significant demographic developments of humanity in the long-term future.

While the world’s Gross Domestic Product (GDP) is estimated to jump to $210 trillion from $95 trillion over three decades, the economic power balance is expected to shift in favor of developing nations. IMF estimates show that GDP growth in non-OECD nations will exceed that of the OECD nations by 2043, with the former seeing their share of global economic cake jump to 53% in 2050 from 39% in 2021. Furthermore, China, the US, India and the EU would make up for two-thirds of global GDP by 2050.

Energy Demand to Grow 22%

The GECF’s independent estimates indicate that in light of the upstream capital expenditure’s increase due to inflation and the jump in the rate of return of domestic investment in upstream oil due to uncertainty about the future of oil demand, oil prices are expected to stay high for three decades. Therefore, the average Brent crude oil prices are assumed at $75 during the estimation period. Moreover, natural gas prices, particularly in Asian and European markets, are forecast to be more fluctuating in the 2050 horizon.

Based on the assumptions associated with demographic changes, economic growth as well as oil, gas and carbon prices, energy demand is expected to grow about 22% between 2021 and 2050 to reach 15,867 million tonnes of oil equivalent. Growing need for clean energies is set to boost the share of natural gas and renewables in the world energy mix and further diversify it. The natural gas share of global energy mix is expected to reach 26% in 2050 from 23% in 2021.

36% Growth in Natural Gas Consumption

Projections also indicate that the share of natural gas in the energy mix in 2025 will go beyond that of coal and by 2043, natural gas will have become the most important fossil fuel in the world energy mix. According to global gas estimates, gas consumption is expected to reach 5,460 bcm by 2050, up 36% from 2021. Air pollution policies and supplanting natural gas for coal in power plants would be the main propelling factors in increased gas consumption over coming decades.

In coming years, natural gas will be used mainly in electricity generation and 43% of the increase in global gas demand in the 2050 horizon would be related to power generation. Of course, new resources like blue hydrogen and transportation sector are emerging for natural gas demand. It is noteworthy that Asia-Pacific, Middle East and Africa account for the bulk of gas consumption in the world. Europe would remain the sole continent to experience a downward trend.

27% Share of Undiscovered Gas

Natural gas production is also set to experience an upward trend in reaction

to the growth in demand. Natural gas production is expected to increase from 4,025 bcm in 2021 to 5,460 bcm in 2050, i.e. a significant 36% growth for this key source of energy in the future. About one-third of the natural gas production growth is estimated to materialize in the Middle East for the horizon in question, only to be followed by Africa and North America, respectively.

The GECF expects 74% of world natural gas production to be supplied by new projects in the future by 2050. Therefore, investment in the gas industry, particularly in the upstream sector, and expanding the supply chain is highly significant. However, one should not neglect the significance of discovery of new natural gas reserves to supply future demand. The results achieved from the gas global model indicate that 27% of the natural gas production should come from untapped gas reserves.

LNG Trade Doubles

Along with increased natural gas production and consumption, gas trading is also poised to prosper. By 2050, gas trading is expected to exceed 1,700 bcm, or 36% growth. This volume of natural gas trading is equal to one-third of total gas demand. Based on the current estimates, natural gas trading in the LNG form will accelerate in coming years to outstrip PNG trading by 2025. The model’s outputs show that LNG trading would double during the 2021-2050 period.

In the long-term, the most important destination for LNG exports will be Asia-Pacific. This region’s share of LNG trade is expected to fall from 72% to 67% although its absolute volume would increase.

The EU is also trying to prioritize LNG in its new strategy for gas supply to the region. For this purpose, in addition to increasing natural gas imports in the LNG form, it will build liquefaction capacity and debottleneck gas infrastructure. LNG is forecast to see its share jump from 24% in 2021 to 46% in 2030 in the EU’s natural gas imports.

Falling Investment in LNG

Increased LNG demand in Asia-Pacific and Europe will make gas trading prosper in all regions by 2030, and intensified energy crisis over the coming decade will force the leading gas importers to boost investment in the new LNG infrastructure in order to guarantee energy security. But from 2030 to 2040, investment in the LNG industry will drop significantly. According to official data, the liquefaction capacity has increased from 270 million tonnes a year to 462 million tonnes a year over the past ten years, which is set to reach 1,026 million tonnes a year by 2050, the bulk of which to be in Asia-Pacific.

The GECF estimates that meeting world gas demand would require $10.5 trillion investment in the upstream gas industry. Gas-rich Africa needs an investment of $1.7 trillion in the upstream gas sector to be able to bring its output to 585 bcm in the 2050 horizon. In order to realize its expected 1,190 bcm output in the same horizon, the Middle East would need to invest $11.1 trillion Furthermore, investment in the mid-stream gas industry for the 2021-2050 period is estimated at $775 billion, driven mainly by LNG demand particularly in Asia-Pacific and Europe.

Africa Role

The GECF Global Gas Outlook has developed two different scenarios to shed further light on the significant and pivotal role of natural gas in the sustainable development of developing nations and its role in energy transition and decarbonization in the global energy system.

In the first scenario, entitled “Energy Sustainability”, Africa and the role of natural gas in its sustainable development are focused upon over the three coming decades. Africa is rich in natural and human resources, which enable it to potentially serve inclusive growth and eradicate poverty. According to official data, more than 600 million Africans have no access to electricity, while 900 million others are deprived of clean fuel for cooking. The energy sustainability scenario seeks to fill the gap between the energy economics, energy security and the environment in Africa by offering a natural gas-based solution.

In this scenario, Africa is assumed to be growing at a big pace over 30 years to bring its per capita production to $5,000 by 2050 with a GDP of $12.4 trillion. Therefore, Africa’s energy demand is expected to grow 154% over 30 years to reach 2,180 million tonnes of oil equivalent. Based on the results achieved from the modelling of this scenario, natural gas along with renewable energies will be the main source of fuel for industries and infrastructure resistant to climate changes in this continent. In addition to upgrading energy security, it will help cap greenhouse gas emissions in Africa. Furthermore, more access to electricity for cooking will be one of the main propelling factors of sustainable development and poverty eradication in Sub-Saharan Africa. Increased demand for electricity is likely to enhance natural gas consumption in this gas-rich continent and bring prosperity to the African gas industry.

Decarbonization Scenario

The decarbonization scenario focuses on a large number of tools used for this purpose in the energy system. As the cleanest hydrocarbon fuel, natural gas may play a significant role in the energy system in the 2050 horizon, particularly through developing carbon capture technologies. In the decarbonization scenario, various methods of decarbonization have been assessed in terms of level of penetration and pace of implementation.

The carbon capture and storage technology is one of the most significant tools of energy decarbonization in the future. Given carbon capture technologies in pre- and post-combustion methods, about 8.7 gigatonnes of carbon dioxide is expected to be absorbed. In this scenario, fossil fuels will see their share decline in the energy mix, dropping from 80% in 2021 to 49% in 2050, the bulk of which related to coal.

Replacing coal with natural gas in power plants and structural changes in the energy sector and industries constitute the main factors in the smaller share for coal in this scenario.

Oil will also see its share significantly all in this scenario. Over 30 years, due to fuel efficiency in the transportation sector and penetration of electrified cars and fuel pipes, the oil’s share will fall 38% to stand at 17% in the 2050 energy mix.

In this scenario, natural gas will remain the main fossil fuel, whose share would go up to 25% by 2050. An increased scale in decarbonization projects through carbon capture and storage and blue hydrogen technologies will be the main stimulants in increased demand for this fossil fuel in the future although the absolute volume of natural gas demand will be 730 bcm below the reference scenario.

Varieties of Energy and Technologies

According to findings and results from the global energy model, it could be argued that the key message of the GECF’s outlook is the necessity of application of various sources of energy and technologies to meet global demand in parallel with achieving the objectives of improving the quality of air and capping greenhouse gas emissions. There is no universal model in this regard and optimal routes of energy will be determined based on local and national conditions, as well as such priorities as geography, natural resources, population, technological and financial capabilities and the choice of general public.

Another vision born out of this report is the pivotal role of natural gas alongside renewable energies in transition to clean energy system in the future.

Natural gas puts an end to consumption of wood and animal droppings for cooking to control local contamination and reduce deforestation. Furthermore, it will improve the quality of air and limit greenhouse gas emissions. Therefore, it may be said that natural gas would serve as complementary and supporting source of energy for renewables, which would guarantee the stability of electricity networks and ensure uninterrupted power supply. Natural gas will also be a key component of petrochemicals and chemical fertilizers in the future.

The results achieved from the decarbonization scenario are indicative of the necessity of increasing the scale of clean energy resources and associated technologies, particularly wind and solar energy, supplanting natural gas for coal in power plants, carbon capture and storage technology, green and blue hydrogen and biofuel.

As it was mentioned, these clean sources of energy and technology have capacity to reduce carbon dioxide by 50% by 2050. Natural gas plays a decisive role in reducing carbon dioxide emissions by steel, glass and cement industries through blue hydrogen. Achieving these realistic environmental objectives require policymaking support by governments within the framework of monetary and financial incentives and designing efficient markets.

World January LNG Imports Down 1.4%

The Russia-Ukraine tension is weighing heavy on the global energy market. December 2022 gas production was down 5% in the European Union and up 6% in China. In January this year, global LNG imports were down 1.4% year-on-year to 36 million tonnes. But global LNG exports were up 2.8% to 35 million tonnes. Gas Exporting Countries Forum (GECF) member states saw their share of global LNG exports in January fall 1.2% year-on-year.

The GECF Affairs Division of the Directorate of OPEC and Int’l Energy Fora of Iran’s Ministry of Petroleum released a report in February to review global gas market and trading in January.

According to this report, one year into the Russia- Ukraine tension, world energy market is still affected by ensuing tensions. The EU has sought to adopt preventive policies with a view to significantly reducing dependence on Russian oil and gas imports; however, shocks caused by eliminating Russia from this market have changed the rules of game and even terms of gas contracts. Heavily dependent on Russian gas imports, the Europeans are trying to enhance their gas storage to withdraw in emergency conditions and minimize harm from this crisis. A moderate winter enabled Europe to weather much-feared crisis that loomed large over the continent. Gas consumption in Europe has dropped year-on-year, which is justified by energy efficiency policies, increased use of coal and hydroelectric energy.

Europe Gas Output Down 5%

In December 2022, gas production in Europe fell 5% year-on-year while growing 3% month-on-month to 17.6 bcm thanks to increased output from Norwegian, British and Dutch fields. That is while gas production experienced growth in North America, China and India.

China’s gas production in December 2022 grew 6% year-on-year and more than 8% month-on-month to reach a record 20.4 bcm. China’s gas production totaled 217.8 bcm in 2022, up 16% from the year before.

India’s gas production in December 2022 grew 5% year-on-year and 4% month-on-month to 2.9 bcm. India’s gas production totaled 33.6 bcm in 2022, up 4% from the preceding year.

In the United States (48 states), dry natural gas production grew 5% year-on-year to 86.3 bcm in January. The 48 states’ dry natural gas production totaled 999 bcm in 2022.

Gas Consumption Down

EU gas consumption was down 19% year-on-year to 40 bcm in January. More-than-average temperatures affected meeting demand in the housing sector. Add to this the impact of EU regulations on gas saving and high gas prices in European hubs that reduced gas demand in the industrial sector. In January, power generation by gas was down 13% year-on-year while the EU’s overall power generation was down 3% due to replacement of gas with coal due to high prices and hydroelectric power generation.

In December 2022, despite relaxation of COVID-19 restrictions and cold weather in China, gas demand by this country (including piped natural gas imports, LNG and domestic production) was down 3.3% year-on-year to reach 34 bcm.

China’s December power generation increased 6% year-on-year, but gas-generated power increased only 2% year-on-year. Coal remained the dominant fuel in the power plants’ fuel mix with a 66% share only to be followed by renewables (15%), hydropower (9%), nuclear (5%) and gas (3%).

In December 2022, India’s gas consumption was down 6% year-on-year to 4.8 bcm. The share of LNG in India’s gas supply was down 41%.

In January, the US gas consumption was down 8.8% year-on-year to 92 bcm. The housing, business and industrial sectors respectively experienced 23%, 11% and 4% decline. The main reason for the fall in gas demand was increased temperature in most regions and reduced industrial activities.

Piped Gas Down 35%

EU natural gas imports by pipeline continued its downward trend to reach 12.7 bcm in January, down 35% year-on-year. Although Norway and Republic of Azerbaijan pumped more gas to Europe, piped gas supply to Europe was down in 2022 due to the decline in Russia’s gas exports, a trend which was maintained in January.

In 2022, Norway’s gas supply to Europe was up 8%, but Russia’s gas exports dropped 55%. Throughout last year, Norway supplied 45% and Russia supplied 31% of EU gas imports.

In December 2022, China piped in 4.9 bcm of natural gas, which was down 7% month-on-month and up 5% year-on-year.

In November 2022, the US piped in 4.3 bcm of natural gas from Canada, which was down 7% month-on-month and down 1% year-on-year.

Global LNG

Global LNG imports was down 1.4% year-on-year to reach 36.7 million tonnes, due to weak LNG imports in all regions except in Europe. Europe’s LNG imports grew 6% year-on-year to reach 12.2 million tonnes to make up for shortcomings by pipelines.

Meantime, Asia’s LNG imports were down 2% year-on-year to reach 23.8 million tonnes, caused by lower LNG imports in China despite easing COVID-19 restrictions.

In January 2023, global LNG exports reached 35.56 million tonnes, up 2.8% year-on-year. The increase was mainly due to higher exports by non-GECF countries alongside GEFC exports and a 26% increase in LNG reloading in Spain, Indonesia and South Korea, which compensated lower LNG reloading in Belgium, Singapore and China.

The GECF member states accounted for 49.7% of global LNG exports, down 1.2% year-on-year. Qatar was the leading LNG exporter to be followed by the US and Australia.

Underground Gas Storage

Since all European countries had gone beyond their storage targets in the run-up to November 2022, they are currently withdrawing from their storage facilities. In January, average daily gas storage fell to 82.5 bcm from the 89.3 bcm recorded a month before. Europe’s January stored gas was 34.8 bcm higher year-on-year. It was also up 19.1 bcm from five-year average. Underground stored gas use was down to 79%. In January, gas injection into underground gas facilities in Europe stood at 1.5 bcm, 13.1 bcm of which was withdrawn.

In North America, underground gas storage was 134 bcm. In January, average daily gas storage fell to 91.8 bcm from the 78.1 bcm recorded a month before. It was up 2.1 bcm year-on-year and 1.7 bcm compared with five-year average.

Europe Share of Gas Finds

Natural gas and liquid discovery in 2022 totaled 1,027 million barrels of oil equivalent (boe), including 94% natural gas. That represents significant figure when compared with the 148 mboe discovered in November 2022 and 296 mboe in December 2021. Therefore, December 2022 can be considered an important month in terms of new discovery.

In December 2022, eight new discoveries were reported, including 6 offshore and 2 onshore ones. Europe accounted for 59% of natural gas finds and Africa accounted for 26%.

In January this year, the operating natural gas drilling rigs, representing upstream activities, totaled 412, up 11 month-on-month and 57 year-on-year.

Asia, Main Driver of 2023 Oil Consumer Market 

Global oil demand in 2023 is expected to grow 2.32 mb/d compared with 2022. China and India continue to remain the main drivers in the oil market this year. According to  the Petroleum Exporting Countries (OPEC) data, China will have a 26% share (590 tb/d) of this global increase in oil demand, but the IEA estimates China’s share at 47% (900 tb/d) of its own estimate of 1.9 mb/d increase. In-between, Russia has become a leading oil supplier to China.The Directorate of OPEC and International Energy Fora of Iran’s Ministry of Petroleum has reviewed the oil market based on the latest reports released by the OPEC, International Energy Agency (IEA) as well as the US’s Energy Information Administration (EIA).

Uncertainties continue to stand out in the 2023 oil market review. The main factors involved are uncertainties pertaining to global economic shrinkage, demand growth in China following the end of the zero-COVID restrictions, continuation of geopolitical tensions in Europe, Europe’s energy supply policy in winter 2023, the EU sanctions regime against Russia’s oil exports and oil price cap decisions.

Oil Demand Up 2.3 mb/d

With projections for the increase in global oil demand this year, demand is expected to exceed 101.87 mb/d, according to theOPEC’s latest report. The main factor would be an increase in travels and growing demand in China.

Non-OECD countries are expected to account for the bulk of crude oil demand growth in 2023. It is largely expected to exceed pre-COVID demand in 2019. But demand by OECD member states in 2023 is widely expected to fall compared with pre-COVID levels. Asian nations like China and India would account for the highest demand in 2023 with the transport sector contributing the most. Demand for gasoline and gasoil and also for jet fuel is expected to rise 1.1 mb/d, showing a 50% increase.

Crude Oil Supply Up 1.44 mb/d

In 2023, crude oil supply is forecast to grow 1.44 mb/d year-on-year. Moreover, non-OPEC oil production is expected to exceed 67.01 mb/d. The US, Canada, Brazil and Guyana would account for the bulk of annual growth in oil supply.

According to theOPEC’s monthly report, US oil supply from various sources, particularly shale plays, is estimated to grow 1.1 mb/d in 2023 from the year before to reach 20.14 mb/d. Canada and Brazil would follow suit. Brazil is said to be planning to bring its output to 4 mb/d.

OPEC Share of Global Trade

OPEC continues to contribute 28% of global oil trade. In January, OPEC’s total output was down 49 tb/d month-on-month to 28.088 mb/d. Member countries’ production has been below OPEC projections. The OPEC members supplied 900 tb/d below their quotas with Saudi Arabia and Iraq having recoded higher declines among fellow members. The OPEC forecasts 380 tb/d oversupply in 2023, while the IEA estimates oil market would need 600 tb/d more oil. OPEC has sought to strike a balance to the market. Adoption of this policy caused OPEC basket price in January to grow 1.9% month-on-month to reach $81.6 a barrel.

OECD member states are also estimated to bring their oil storage to 2.887 billion barrels, which would still be below thefive-year average. Now, storage has been 95 million barrels below the five-year average. Furthermore, despite the increase in US oil stock, strategic petroleum reserves (SPR) of this country has dropped 222 million barrels. Before September, 26 million barrels would be released from the SPR, which would be in compliance with the US export plans.

A key market factor in 2023 under the present geopolitically special circumstances is the continuation of policy of freeing up SPR in the US and its allies.

Russia Grey Trade

OPEC’s latest monthly report says Russia would see its oil supply drop more than 900 tb/d against the backdrop of geopolitical tensions with Ukraine and Western embargo. However, with the change in the flow of oil supply to Europe, the bulk of Russian supply would be destined to Asian nations. Other sources estimate Russia’s oil supply decline at more than 1 mb/d.

In reaction to the tightening of Western oil sanctions, Russia has sought to evade detection by resorting to grey oil trading. But data shows Russia has shipped crude oil mainly to Asia, shifting away from Europe. West’s embargo has slashed Russia’s oil revenue. Russia saw its revenue fall in January by 46% due to discounts in oil selling.

Another key issue associated with the oil market is underinvestment in this sector at the global level. If China’s demand increases in 2023 following lifting of tough COVID-19 restrictions, oil prices are expected to reach $100 in the second half of the year, in which case, buyers of Russian oil would increase due to cut-price oil.

Petrobras Aiming to Start Up 3 FPSOs

Petrobras expects to produce first oil shortly through its Anna Nery FPSO on the Marlim Field in the Campos Basin offshore Brazil.

The facility is part of the Marlim 2 Revitalization project. A second FPSO, Anita Garibaldi, arrived late last year at JurongAracruz Shipyard in Espirito Santo State and is presently undergoing commissioning, inspections and final tests. It should begin operating on Marlim in the second half of the year.

Petrobras also expects to activate the Almirante Barroso FPSO during the second quarter on the Búzios Field in the presalt Santos Basin. The platform is at Brasfels Shipyard in Rio de Janeiro State for commissioning/acceptance tests.

-Eni, EGAS to Consider Egyptian Gas Flaring Initiative

Eni has signed a memorandum of intent (MoI) to collaborate on emission-reduction technologies, including gas flaring reduction and gas valorization, with the Egyptian Natural Gas Holding Co. (EGAS).

The two companies plan joint studies to identify opportunities to reduce emissions in Egypt’s oil and gas sector, developing a “master plan of initiatives leading to additional gas valorization,” Eni said.

RenewableUK Laments Hornsea 4 Wind Farm Setback

UK’s The Planning Inspectorate has announced a delay of nearly five months before the Secretary of State takes a final decision on approval for the Hornsea 4 wind farm, 69 km from the Yorkshire coast in the North Sea.

RenewableUK's executive director of Policy Ana Musat said the delay to the consent order was disappointing.

“This landmark offshore wind project has the potential to supply an enormous 2.6 GW of clean electricity to the grid, displacing expensive gas, reducing bills and boosting our energy security," she said.

"At a time when countries like the US and the EU are doubling down on attracting clean energy investment through financial incentives and a stable policy framework, the UK cannot afford to create unnecessary hurdles for investors and developers.

YPF Enters Upstream Agreement With ONGC Videsh

ONGC Videsh, ONGC’s overseas division, has signed a memorandum of understanding (MoU) with Argentina’s YPF during the Energy Week 2023 conference in Bangalore.

The MoU covers a cooperation between the two companies in the energy sector, including exploration and development of upstream oil and gas opportunities and research/training centers.

ONGC said it was also in talks with various major oil companies, service groups and others concerning deep-water exploration offshore India and related technologies.

Chevron Commits $26mn to Australia CCS Research

Chevron Australia will contribute a combined A$38 million (US$26.3 million) to carbon capture and storage (CCS) research projects in Western Australia and Victoria, advancing knowledge of the critical emissions technology for a lower carbon future.

Of the total contribution, A$22 million (US$15.2 million) has been committed to the Barrow Dampier CCS Regional Study, which is led by SLB, and supports a 3D seismic and storage assessment to identify new CCS opportunities in the Carnarvon Basin offshore Western Australia.

Chevron Australia has also committed A$16 million (US$11 million) to support development of new infrastructure at the Otway International Test Centre in Victoria.

Turkey Gas Hub Ambitions

Shuaib Bahman

In 2008, Turkey’s Ministry of Foreign Affairs unveiled the country's national energy strategy, and for the first time in that document, it talked about Turkey isbecoming the center and hub of energy transit from Central Asia, the Caucasus, the Middle East, the Balkans, and Russia to Europe. Turkey's foreign policy has since tried more and more towards the realization of this goal and made a lot of efforts in the form of long-term economic and political plans to transform Ceyhan Port into an energy terminal in the region. In this regard, Turkey has always been one of the parties present in discussions related to energy transmission lines to Europe.

However, Ankara did not make significant achievements in this regard until the outbreak of the Ukrainian war. Since the beginning of the war in Ukraine and subsequently the discussion of the Nord Stream pipeline embargo by Germany and other European countries, Turkey once again highlighted its position as an energy hub.

Turkey Status

Although Turkey has made big energy explorationin the Black Sea and the Mediterranean Sea in recent years, this country is mainly known as a consumer of oil and gas. For this reason, in the past years, several routes have been established in this country to transport oil and gas. Currently, there are many gas transmission lines in Turkey already operational or having been designed, the most important of which are:

Tabriz-Ankara Pipeline which has been in operation since 2001 and has capacity to transfer 7.5 bcm/y of gas. Gas transmission through this pipeline has faced problems in recent years. In addition to technical problems and several explosions along the pipeline route, the debate over the price of gas exported from Iran to Turkey has always been a challenge.
TurkStream which has been in operation since 2005 and has an annual capacity of 16 bcm of gas. Currently, the bulk of Russia's gas exports to Turkey is transferred through this pipeline.
Baku–Tbilisi–Erzurumwhich was built in 2006 and has a maximum transfer capacity of 8 bcm/y. Over the past years, gas transmission from this pipeline has been stopped many times due to the decrease in gas production of the Republic of Azerbaijan in the Shah Deniz field.
Turkey-Greece Natural Gas Pipeline which has been built since 2006 with a capacity of 11.5 bcm/y. Turkey received 10 to 14 mcm/dof gas from the Baku-Tbilisi-Erzurum pipeline, of which 250,000 cubic meters was exported to Greece.
"Arab Gas Pipeline which was supposed to be ready for use in 2011, but has not yet been completed. The launch of this project has remained in an aura of uncertainty due to the unrest in the Middle East and the changes known as the Arab Spring.
Nabucco Pipeline, which has the capacity to transfer 31 bcm of gas. This pipeline can transfer a significant amount of gas from the Caspian Sea to Europe through Turkey.
Turkey-[Zionist Regime] Pipeline which has been stalled in the negotiation stage due to the strained relations between Ankara and Tel Aviv in the past years.
Iraq-Turkey Pipeline whose negotiations have not yet reached a conclusion. As the above-mentioned pipeline must pass through Kurdish areas, therefore, an agreement on it is impractical, at least in the near future.
Assaluyeh-Bazargan Pipeline which has been negotiated, but due to the increase of sanctions and international pressure on Iran, it is impossible to agree and implement it at least in the near future.

Opportunities and Challenges

The war in Ukraine changed the conditions governing energy markets in the world, and in the meantime, most European countries faced severe challenges. The Europeans, who wanted to import more gas from Russia by launching the Nord Stream 2 pipeline, not only failed to achieve this goal due to the Ukraine war, but also had to embargo their other energy imports from Russia.

Although these actions of European countries are logically understandable, they have created serious voids in the field of energy supply. For this reason, European countries have once again thought about alternative sources and routes for their energy supply. In the meantime, as both Russian sources and transmission lines from Russia have been sanctioned, Europe is forced to think about other sources and routes.

Under such circumstances, Turkey's geographical position has been highlighted once again as a country that can be the hub and center of energy transfer to Europe. This has been strongly welcomed by Turkish authorities and they have also publicly announced that they want to transfer gas from Russia, Iran, the Caucasus, Central Asia and the Middle East to Europe through their territory. Turkey is happy with the current situation for several reasons:

First, the transfer of gas from Russia, Iran, the Caucasus, Central Asia and the Middle East to Europe is in line with Turkey's goals in order to become the energy hub of the region.

Second, the transfer of gas from Russia, Iran, Caucasus, Central Asia and the Middle East to Europe can be considered an effective role in Ankara's cooperation with the European Union and clear the way for its integration into the Union.

Third, with the transfer of gas from Russia, Iran, Caucasus, Central Asia and the Middle East to Europe, this country gets a lot of revenue through the right of transit and the passage of pipelines through Turkish soil.

Fourth, by becoming the energy hub of the region, Turkey is actually diversifying its imported sources and energy transmission lines. In fact, buying gas from various suppliers reduces the country's vulnerability in accessing energy sources.

Despite the benefits of Turkey becoming an energy hub for Ankara, this process also faces severe challenges:

First, if Europe is to buy Russian gas through Turkey, it will have to pay a higher price for it, which is not very economical. At the same time, this issue also contradicts European sanctions and makes the economic pressure against it ineffective.

Second, transfer of gas from Iran to Turkey is largely impossible due to Western sanctions against Tehran. Because Iran's energy infrastructures require financial and technical investment, which is not possible without lifting Western sanctions.

Third, the Europeans have entered into severe political challenges with Turkey in recent years and have not forgotten Turkey's blackmail in issues such as preventing Syrian refugees from entering Europe. Just as Turkey has set conditions for countries such as Sweden to join NATO, which is considered blackmail by Europe.

Fourth, the Middle East region has been involved in a situation of increasing instability and insecurity in the past years. The two countries of Syria and Iraq, which can be the route of transiting the energy of other Arab countries to Turkey, have significant problems both inside and outside.

Fifth, contrary to initial estimates, Azerbaijan's gas is not so much to be a reliable and sustainable source for Europe. At the same time, gas transmission from Central Asian countries such as Turkmenistan and Kazakhstan is also facing major challenges due to the difficulties and obstacles of constructing a pipeline from the Caspian Sea bed.

In general, despite the fact that turning Turkey into the energy hub of the region is an old plan and Ankara has always sought to implement it, there are many challenges in this regard. Of course, some of these challenges have become different compared to the past due to the Ukraine war and the change in the conditions of transmission and supply of energy in Europe. However, Turkey still has a long way to go to become an energy hub. Of course, this does not mean that Ankara will give up on this ambitious plan.

Europe Will Add 50 bcm of LNG Import Capacity by End-2023

Ongoing tensions between Russia and the West has prompted the European Union to find alternatives to its gas imports from Russia for developing its LNG imports capacity.

To speed up the process, Europe has opted to seek out floating storage and regasification units (FSRUs) to rapidly build out its LNG import capacity.

Energy Intelligence calculates that from September 2022 to October 2023, FSRUs will provide Europe with an extra 36.44 million tonnes per annum (mtpa), or the equivalent of 49.55 bcm/y, of new LNG import capacity. Comparatively, it is still dwarfed by the EU’s total 155 bcm of Russian piped natural gas (PNG) imported in 2021 but will be compensated by an increase in other imported piped supplies, an increase in renewable capacity and a slash in gas demand.

Germany

Germany, Europe’s largest Russian gas importer, will install up to five FSRUs by end-2023, equivalent to around 16.2 mtpa, or 22 bcm/y, of new import capacity. This is expected to replace most — but not all — of the country’s Russian piped gas imports, which totaled around 46 bcm in 2021. Out of the five FSRUs obtained by Germany, two are set to begin operations in December — the 3.7 mtpa Brunsbuttel FSRU, operated by German utility RWE, and the 3.3 mtpa Lubmin FSRU, developed by Deutsche Regas.

The Brunsbuttel terminal will receive its commissioning cargo from Abu Dhabi National Oil Co. in late December after it signed an agreement with RWE last week. The parties also signed a memorandum of understanding (MOU) over a multiyear LNG supply deal into Germany. Meanwhile, French major TotalEnergies is set to provide the FSRU for the Lubmin terminal and is also expected to operate and supply the project.

Two more FSRUs are scheduled to come on line in the port of Wilhelmshaven in northwest Germany, most likely during 2023. German utility Uniper will operate the first one with 5.5 mtpa of capacity, which is expected to start operations by the end of this winter. Another 3.7 mtpa FSRU project planned to start up by October 2023 is being developed by Belgium-based Tree Energy Solutions (TES), utility E.

Italy, Europe’s second-largest importer of Russian PNG, is planning to add an extra 7.4 mtpa to the country’s existing LNG import capacity of 10.9 mtpa. Italian gas grid operator Snam purchased three FSRUs this year, two from Bermuda-based shipowner Golar and another from Norwegian shipowner BW LNG.

Elsewhere in Europe, the 5.9 mtpa Eemshaven import terminal in the Netherlands started operations in September and has already received eight LNG cargoes. The terminal is operated by Dutch grid operator Gasunie and consists of the Golar Igloo and the Eemshaven LNG FSRU vessels, which the company chartered for five years from Belgian shipowner Exmar. Eemshaven’s import capacity has been fully booked by Shell, Engie and Czech utility CEZ.

In France, Total is also going to install its 4 bcm/y Cape Anne FSRU at the port of Le Havre, expected to be operational in September 2023. France already has four operational LNG import terminals with a total import capacity of 25.6 mtpa, Europe’s third largest after Spain and the UK.

Baltics, Southeast Europe

In the Baltic Sea, Finland and Estonia are jointly developing an FSRU import terminal to supply both countries, planned to be installed at the port of Inkoo on Finland’s southern coast by this winter period. LNG imported here will be sent to either country through the bidirectional 2.6 bcm/y Balticconnector pipeline.

In southeastern Europe, a region which has been extremely dependent on Russian piped gas imports, Croatia is planning to double the regasification capacity of its Krk FSRU to 6.1 bcm/y. No timeline for the completion of the expansion has been provided. In Greece, the long-planned 4 mtpa Alexandroupolis FSRU is expected to start up by end-2023 in the northeast, complementing the country’s existing 5.1 mtpa Revithoussa import terminal, located near Athens.

Northern Europe

With the operation of three LNG import terminals in Germany in September to January and the addition of more of these terminals in the Mediterranean region in the next few months, the process of increasing the LNG import capacity of the Northwest European region will accelerate. In addition, Germany is able to import gas through the Emden and Dornum pipelines in Norway. At the same time, the gas import of this region from Russia has decreased.

The increase in the capacity of European gas conversion terminals has led to an increase in LNG imports and an increase in the level of storage tanks. However, the forecast of mild weather in the second half of December has somewhat reduced the amount of LNG imports. At the same time, it is expected that from the end of this week, the import process will pick up again due to the need of this region for LNG to supply consumption for the months of January and February.

With the increase in the number of import terminals, Europe is expected to absorb more of the transatlantic LNG cargoes to refill gas storage tanks for 2023. In April, gas injection into the European gas network from LNG terminals increased, and with the operation of a floating storage unit and conversion to floating gas in Germany, it is expected that in April 2023, the levels of gas storage tanks will be at a higher level than that of April 2022.

It should be noted that over recent months, gas consumption volume in the industrial sector in the European region has decreased due to soaring gas prices, and it is unknown whether the decrease in gas prices could be a stimulus for the return of part of the demand of this sector.

NISOC Eyes Output Capacity Hike

Mahnaz Mohammad-Qoli

National Iranian South Oil Company (NISOC) is planning to enhance production within the framework of short-term annual plans. Given NISOC’s 80% sharein Iran’s oil production, planning by the company’s Technical Directorate is of paramount significance. The following is the text of the interview of Ramin Rowghanian, NISOC’s technical director, with“Iran Petroleum”on oil output hike plans.

What areplans ofNISOC’s Technical Directorate to enhance oil production in the regions administered by the company?

NISOC is expected to add 68 tb/d to its oil output by March 2023. In other words, it will see its output increase to 3.001 mb/d from the 2.933 mb/d recorded in March 2022. To that end, various surface and subsurface projects including launching development and workover wells should be implemented.

Will NISOC see its production capacity exceed 3 mb/d by March 2023?

Yes, it is planned to go beyond 3 mb/d, but it is subject to conditions and obligations, as is the case with every other similar project. All Directorates aim to meet obligations for enhanced production. NISOC is tasked with oil production. Furthermore, it supplies 16% of national gas and provides 1.5 million barrels of feedstock to refineries.

How many wells are to be developed or worked over?

Over the coming five years, 315 wells are to be drilled and 534 wells to be worked over in NISOC-run areas.

How do you see the quality of NISOC oil?

The quality is acceptable in terms of both H2S and salinity. However, due to some problems in our facilities in some periods of time, and/or resuming production from some reservoirs; the quality of oil is likely to decline. Throughout the year, we are obligated to deliver oil of desirable quality in terms of salinity and H2S to refineries and export terminals. NISOC has always done its utmost to supply oil for export or feeding refineries at good quality and it has so far been successful in this regard.

It is said that heavy oil production has increased at NISOC reservoirs. Why?

NISOC produces oil of a variety of grades. Some of our reservoirs contain light crude oil, but Bangestan reservoirs produce heavy crude oil. We produce both light and heavy grades. Light crude is mainly sent to refineries, while heavy crude is destined for exports. The reservoir’s pressure falls off as soon as it starts production, releasing part of the gas solved in the oil. However, it would be not so as to significantly affect the quality of oil. Reservoir fluids are a natural characteristic of the reservoir.

National Iranian Oil Company (NIOC) has recently focused on the rehabilitation of low-yielding wells. How many of these wells are run by NISOC?

Some wells may experience problems when reservoirs start production. One of major tasks assigned to NISOC’s Technical Directorate is to resolve these problems and restore production, just like workover on many wells. But in the rehabilitation of some wells, some sort of technology may be required, which is not available to us or which may require certain operations. The planned rehabilitation of low-yielding wells is aimed at bringing such wells back to production. In this regard, NISOC inthe first step assigned 33 wells to knowledge-based companies to bereviewed and offer solutions. In case these companies fare well, in the second and third steps, more wells would be introduced for the purpose of enhanced production or rehabilitation.

Do knowledge-based companies present their plans to NISOC?

The Science Park is in charge of this. The data about low-yielding wells is provided to knowledge-based companies through the Science Park. In the first step, every knowledge-based company may offer proposal for five wells. We have already received proposals from knowledge-based companies, which we are beingreviewed now.

How much can rehabilitation of 33 wells add to NISOC’s output?

It depends on a variety of factors and varies from well to well. But if we consider an average 500 b/d output hike for each well, 33 wells will see about 15 tb/d output hike.

Is water injected into reservoirs?

Not for enhanced recovery, but more than 200 tb/d is injected for the protection of the environment. We recently injected water into the Ahvaz Bangestan reservoir for enhanced recovery on a pilot basis, which would be done within two years. EOR projects are costly and the oil obtained in this way costs high. Therefore, their success should be guaranteed. Everywhere in the world, a large-scale project is not introduced overnight for a reservoir. First, a pilot is chosen and then in case of success the entire project will be engaged. At NISOC, the pilot project is in Ahvaz Bangestan, where we started by injecting 10 tb/d of water in an area of 2 km long and 2 km wide. If we receive a positive feedback, we will extend it to the entire reservoir and then to all Bangestan reservoirs.

How much is NISOC planning to enhance its output over the coming five years?

With plans worked out so far, we hope to reach 3.28 mb/d output by March 2027.

To what extent have you reached your previous objectives?

We met more than 98% of our commitments and we have always made plans based on our production potential. We never offer any exaggerated figures which we would miss. Over the 43 years following the Islamic Revolution, our plans have always been practical and we have met our targets at 98%.

How much will be added to NISOC’s desalination capacity?

NISOC’s desaltershave a total capacity of 2.5 mb, which is increasing. According to projects we have defined so far, we will bring the desalination capacity to 3.5 mb. We intend to establish skid-mounted desalters with a capacity of 2 kb, which we would use until fixed desalination installations are set up.

Scientific centers are said to be manufacturing downhole pumps. How will NISOC use them?

Yes, we have a plan under way with a knowledge-based company affiliated with Chamran University for the domestic manufacturing of 10 sucker rod pumps (SRP). Furthermore, three other local companies are ready to manufacture electrical submersible pumps (ESP). We plan to install 190 SRP and ESP pumps within five years at our reservoirs wherever needed.

SeaPad VesselSupports 18 South Pars Platforms

Negar Sadeqi

The SeaPad logistics platform is located 105 km off Assaluyeh, which is tasked with providing logistic and operational support to 18 South Pars platforms that totally produce 350 mcm/d gas. Nearly 100 persons work on SeaPad to make sure gas flow from the giant offshore gas reservoir would not halt.

Amid a treacherous winter with record gas consumption in Iran, we entered the SeaPad support platform, which is also called Zone 2 Vessel. We were flown in by helicopter for 30 minutes to reach the platform. There was no bird in the sky and the sea waves hit the platform with a wavy movement. South Pars Phase 9 platform, which produces 28 mcm/d of gas, is located right in front of us. The logistics manager of the platform was checking the air temperature and said fuel and other necessities of the platforms should be delivered to the service workers.

18 SP Platforms

The SeaPad platform started out in 2020, covering 105 km off the Persian Gulf. It has a small yard within itself. More than 100 specialists are monitoring the operation of 18 platforms round the clock to keep gas flowing.

Welding and turning sites, instrument repair and painting facilities are all installed on the vessel. Abbas Shams, deputy head of SeaPad, said: “In case the platforms need any reparation we should do it in the shortest possible time. If we see it impossible to conduct reparation offshore we have to move the equipment onshore immediately.”

“With the vessels at our disposal, we support platforms by providing fuel and food and whatever else the staff may need on the platforms,” he added.

Shams was speaking about the location of the vessel which started trembling after waves struck the hull. “Sometimes, the weather is too bad to allow for logistic support by vessel or helicopter. We have to wait for the sea to calm down,” he said.

Ever since this vessel was launched, fuel and food supply to platforms has been planned so that production would not be interrupted even if climate conditions become unfavorable for one week.

Shams, who has been working on South Pars platforms since 2005, said: “However, we have plans for tough weather conditions.”

Platforms Repair Offshore

However, that is not all this vessel is doing. Here is a small yard for the reparation of items required by the platform. Shams said 80% of components of platforms is repaired on the vessel.

Alongside reparation work, regular inspection of the platforms is also an obligation for the staff on the platform to fulfil. The farthest platform from the SeaPad is four hours away from the vessel. The inspections are carried out on a daily basis. Sometimes, repair task is needed to be done on the platform, regardless of whether being hot or cold. Highly humid warm weather has its own difficulties while climate changes in autumn and winter have their own challenges. However, the point is that the work is never stopped.

In parallel with these inspections, there is annual overhaul. In winter, domestic and business gas consumption goes up. The South Pars gas field is currently supplying 75% of Iran’s gas needs. Overhaul is often carried out in summer so that production trend would go on smoothly in winter.

Shams said: “In order to optimize overhaul, we have to arrange with the refineries in order to suspend the platform’s gas production when gas consumption declines in order to proceed with overhaul.”

Safe and Stable Production

However, it would make no difference for those working on platforms or supporting them to work in winter or summer because in winter, gas is often consumed by households and businesses while in winter it feeds power plants. Shams said what matters is to have safe and stable production.

Overhaul often starts in April and goes on until September. “In spring and winter, climate conditions are favorable and we can cover the platforms more effectively. Therefore, we implement overhaul in the shortest possible time and with maximum quality. Overhaul is often done by 20-member teams,” said Shams.

In winter, the most important job for those working on this vessel is to guarantee the nominal production of each platform. By regular monitoring of these platforms, assurance is made that the equipment has not been damaged.

The weather condition is favorable in South Pars for about two-thirds of a year. Shams said only two or three days it may become impossible to work on platforms. That may happen when even helicopters would be of no help and climate conditions should become favorable first.

Reverse Engineering

We stepped onto the vessel. Everywhere was wet due to rainfall and the sky was covered with black clouds. The weather is set to become worse. We enter the repair site. There are a variety of devices and components there. One engineer is perusing a map and another one checking a component. Hossein Sedaqati, a drawing technician, said: “This

is self-sufficiency work. In addition to reparation, we do reverse engineering.”

He said he has been working on reverse engineering for 18 years, adding that he has done it on more than 20,000 items so far. Sedaqati has been working on South Pars platforms for six years now.

Until 10 years ago, the parts that experienced problem on platforms had to be sent to the countries of origin for reparation. Repairing parts in platforms or vessels meant nothing and nobody expected Iranians to do so. But as sanctions were tightened against Iran’s petroleum industry, Iranians started building platforms and its parts and then even learnt how to repair them in the country.

What Sedaqati is doing in this vessel is apparently simple, but the fact is that sanctions have deprived Iranians of access to many parts or technical knowhow for production. Therefore, they have to manufacture parts through reverse engineering, but at higher standards. It should be kept in mind that the first mistake in the sea would be also the last one.

Showing a valve part, Sedaqati said: “With sanctions in place, if we were to order this part from its manufacturer it would last two years to get it. But now I repair it in a single day by applying reverse engineering.”

No Foreigner on Platforms

Majid Qorbani, head of reparation and instruments in SeaPad, said: “Instruments function like the brain for the platform. We need to control the activity of platforms. Sometimes we have to move onto the platforms to repair the control equipment and sometimes we need to bring the parts here for repair.”

Asked what if reparation fails, he said: “What would happen if the brain stops working? The entire body will come to a halt. Without repairing the instruments, the process of gas production will hit snags. We feel compelled to not let this happen.”

Qorbani with 22 years of experience in the petroleum industry has been working on this platform for 17 years now. He has worked alongside France’s Total in South Pars. But he noted that no foreigner has been on the platforms since 2006. “We are all Iranians. We have become so skilled in manufacturing and repairing platform parts that we no longer need to have even a single foreigner with us.”

He recalls days when foreign engineers were required even for simple reparations and Iranians did not believe in their own capabilities. “We imagined we would never be able to repair anything. It was rather a dream for us to building our own platforms. But today, everything is real.”

Then we go to the section wherein corroded parts are gathered. A young engineer is busy painting the corroded equipment. “To do so we have to first scrape off rust. After we reach an ideal level we would apply the layers of painting,” he said.

Each weather condition requires some certain type of paint. These paints are bought from companies approved by National Iranian Oil Company (NIOC). When the equipment is painted, it is immune to rusting for two years.

The platform’s jacks should be also scraped off rust. The painter said: “There is oxygen shortage in the water and when the water strikes the jacks, metals are corroded. We have to dive for painting. If we don’t monitor the corrosion of the platforms’ jacks, they are likely to collapse.”

When we leave the painting section, rainfall has become faster. The platform of SP19 is shining like a star in darkness. Seabirds are flying. The scene is at times beautiful and horrible. It is blowing and the wind is likely to take me away if it becomes stronger. However, the platform is producing without being affected by rainfall and wind. I had never experienced stormy weather at sea. The rainfall picks up pace very soon. Sadeq Igdar, the logistics chief, said: “In some nights, the rain and storm are so strong that we think the rainfall would not stop for several days. But, several hours later, everything is back to normal as a mysterious silence dominates the sea.”

I liked so much to walk in the darkness and watch the rainfall, but Igdar did not let me, saying: “The rainfall and the wind are likely to push you into water. Such climate conditions are unpredictable.”

Then we go into the electricity generation section. One engineer there tells us: “We offer secondary support to the platforms to produce and distribute electricity and we also repair electrical motors.”

“When the generators are off and there is no diesel, production stops. We should not let that happen. In some cases, we have only five minutes to repair the equipment in question,” he said.
Asked if it was easy to deal with 18 gas platforms, he said: “I don’t say it is easy as we have to be ready round the clock to resolve any problems that may occur out of the blue. But it is not too tough to be impossible.”

He added: “I also know that we are more skilled than the Qataris working in North Dome because they depend on Western experts for most of their activities. But we are doing our job on ourown.”

Our one-day trip to South Pars to visit various sections of the SeaPad logistics vessel comes to an end. Just before the flight, it was raining heavily. I first thought we had to stay at least three days at sea, but as Igdar had said the rain came to an end after one hour and the sky became clear. It were as if no rain had come. I could see other South Pars platforms than the platform of SP9. South Pars was experiencing a spring weather while everywhere else across Iran gas consumption was smashing records. However, due to relentless work in South Pars, no gas halt was reported in Iran.

South Pars is jointly owned by Iran and Qatar. Thirty percent of this supergiant offshore gas reservoir lies in Iran’s territorial waters. The rest lies in Qatar, where it is known as North Dome. Iran started gas recovery from South Pars in 2002, ten years after Qatar. Iran has so far invested about $81 billion in developing 24 phases of South Pars. The current gas production capacity of South Pars stands at 705 mcm/d. South Pars has currently 13 refineries and 37 production platforms. The SPQ1 platform supports 18 South Pars platforms. With the development of other South Pars phases in recent years and the addition of 10 new phases to the gas field, the SeaPad vessel become operational in 2020 in support of SPQ1 for new platforms.

Five Championship Titles in Asia

Like every other footballers hailing from downtown districts, he had started playing football with neighbors. His dream came true soon though. He was 14 when he became a professional footballer. Several years later, he joined the national squad, but he became the Asia champion in futsal. 

Ahmad Par Azari, a footballer-turned-futsal player, is an employee of National Iranian Oil Company (NIOC). Currently heading NIOC Physical Exercises Department, he has not abandoned futsal. He is a futsal coach, sharing his experience with aspirants.

“Iran Petroleum” has conducted an interview with Par Azari.

First and foremost, tell us a brief biography of yours please!

I was born on 12 July 1975 in a southern district of Tehran. Like all other young boys who were fond of football, I looked for my dreams in the yards. My parents were opposed to me playing football and insisted that I go to school. I didn’t dishearten them and alongside football I got my BA in physical exercises from the University of Tehran.

When did you start playing football?

Professionally, I started playing in 1991 in the “Rah Ahan Club”. I was 16 when I played in the Tehran Adolescents and Youths Matches. I was with football until 2003, playing with teams like Fath.

How come you switched to futsal?

From 1996 to 2001, Ramadan Cup was held in Tehran. The matches were popular and most footballers played for the Cup. By that time, I played futsal in the Ramadan Cup for Rah Ahan. At that time it was known as indoors football before being known as futsal. That motivated me to become a futsal player.

Why did you stop playing football?

In 2003, I was playing both football and futsal for “Rah Ahan”. We were always among the four teams in the quarter-finals. That is why I was invited to the national futsal squad. I was told then I had to abandon football before becoming a futsal player. I chose futsal and became a futsal player. My first team was “ShensaSaveh”.

How long did you play futsal and which teams were you with?

I’ve been engaged in sport for 30 years now. But I professionally became a futsal player in 2003. Of course, I become a coach from time to time. I was with such teams as ShensaSaveh, Elmo Adab Mashhad, ShahidMansouriQarchak and TasisatDaryaei. 

What honors have you obtained?

I became the Asian champion five times. I also participated in the World Futsal Cup. In domestic matches, I have become champion and runner-up many times. I participated in at least 20 tournaments with Rah Ahan, ShensaSaveh, and TasisatDaryaei, not to mention the Ramadan Cup.

When did you join the petroleum industry and what posts have you held so far?

I was hired by NIOC in 2004, when I was in the national squad. We were several national players to be employed by NIOC. NIOC could have a competent team with at least five national players very easily, but unfortunately then managers did not pay due attention to this fact and we started our work in administrative posts.

Which teams have you coached?

I coached pro league teams like TasisatDaryaei, Daneshgah Azad, Raga Shahr-e Rey, ZandiBeton of Kelardasht and SanayeGitiPasand of Isfahan. I have also coached Olympiads and domestic matches. In Kuwait, I led a team. I visit Kuwait during the holy month of Ramadan or any other time when the Iranian league is off.

What titles have you achieved in coaching?

With TasisatDaryaei and SanayeGitiPasand we became the champion of Iranian clubs pro league. Also with my coaching, the ZandiBeton futsal team moved up from the first league to pro league.