Iran associated gas gets $1 billion FLNG offer
Foreign companies are weighing $800 million-$1 billion of investment in floating production of LNG from associated gas at Iran’s offshore fields in the Persian Gulf, a senior energy official says.
They are currently studying the viability of the project to convert 200 million cubic feet of associated gas per day to liquefied natural gas, head of investment at the National Iranian Oil Company (NIOC) Ali Kardor said on Sunday.
“About $800 million to $1 billion will be invested by the foreign sides for FLNG production,” he said, without naming the companies involved.
“Since the proposals have not been finalized yet, revealing details might burn the offer because these projects have opponents outside Iran. Hence, we are waiting for them to become more conclusive and announce them then,” Kardor added.
The project is expected to take two years to come online, with the foreign developer to be allowed to use the produced gas for a further three years, he said.
In August, Minister of Petroleum Bijan Zangeneh said a French company had proposed to buy associated gas from an offshore Iranian oilfield in the Persian Gulf in order to convert it into LNG.
The Fars news agency said the company had proposed to process the associated gas from the Forouzan oilfield and turn it to LNG.
The project would mark Iran’s first-ever processing of natural gas associated with oil production instead of burning it off as the country often does in a practice known as flaring.
Iran planned to pipe the associated gas from the Forouzan field, which it shares with Kuwait, to an LNG facility on Kharg Island before intensified sanctions prevented the scheme from taking off.
According to Ministry of Petroleum figures, about 5.4 million cubic meters (189 million cubic feet) of associated gas is burnt off per day at the Forouzan platform.
Last week, Zangeneh said Iran and Belgium were in talks for possible floating production of liquefied natural gas (LNG) off the Kharg Island.
“If the two sides show flexibility and technical and economic negotiations bear results, (the Belgian side) will bring FLNG facilities to the Kharg region in not a distant time and Iran will begin producing LNG for the first time,” he said.
Iran possesses the world’s largest proven gas reserves, with a potential to become a top producer.
LNG is becoming a fast growing business as shipment of the frozen gas to customers across the world is becoming more facile, dispensing with pipelines which often cost a lot to build.
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