Baku, Azerbaijan, Nov. 15
By Umid Niayesh- Trend:
Three foreign companies have submitted proposals for producing liquefied natural gas (LNG) from flaring gas in Iranian oil fields in the Persian Gulf, an Iranian oil sector official said.
These foreign companies are currently studying the floating liquefied natural gas (FLNG) project, Ali Kardor, deputy managing director for investment and finance at the National Iranian Oil Company (NIOC) said, Fars news agency reported Nov. 15.
"They are studying our conditions to see whether such a project is economically justified or not," noted Kardor.
The projects envisage converting 200 million cubic feet of flaring gas to LNG, adding that an anticipated $800 million-$1 billion is to be invested in the projects by foreigners, Kardor underlined.
He further said that Iran will supply companies with gas during the two years which is projected for construction of the FLNG unit.
The companies will also receive gas for three years after the projects are completed, he added.
The allocated sour gas will be sold at 1.75 to 4 cents for the companies, depending on the oil fields, the Iranian official underscored.
Kardor refused to provide more information about the project or the foreign companies slated to participate, underling that once the project is finalized, more details will be shared with the public.
Earlier, Alireza Kameili, head of the National Iranian Gas Company, said that Tehran is in talks with the largest floating LNG company for production of liquefied natural gas, without revealing the name of the company.
"Due to their high economic viability, Iran is moving in the direction of building FLNG plants," Kameli said.
The official made it clear that several LNG mega-projects, currently halted due to international sanctions, are still on track. "LNG projects are being pursued as before and FLNG is an alternative option."
Iran had earlier contracts with Anglo-Dutch Royal Dutch Shell, Spain's Repsol and France's Total, to build three LNG plants, but those companies abandoned the projects in 2010 due to international sanctions.
Tehran sees LNG as becoming more viable than piped gas, which requires a great deal of time and high costs to reach Europe.
Further, the country plans to build the capacity to export 40 million tons a year of LNG, which is super-cooled to minus 162 degrees Celsius for shipment by special tankers.
Iran Offshore Oil Company CEO Saeed Hafezi said early in November that Tehran would produce liquid gas from associated petroleum gas (APG) at the Forouzan oil field, as called for in a contract to sell APG, which is expected to be signed soon.
Hafezi said that under the terms of the proposed agreement, a consortium of Iranian and foreign companies would produce LNG at sea using the FLNG process.
Last year, Iran signed three contracts to sell flare gas, including the Forouzan flare gas contract, which is soon to become operational, he added.
The National Iranian Oil Company will also issue tender announcements before the end of the current Iranian fiscal year, which ends March 20, 2016, in which APG will be offered.
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