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    Iran Starts up $3.4bn Gas Refinery


The facility will reduce Iranian gas flaring significantly, officials say.

by: Joe Murphy

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Iran Starts up $3.4bn Gas Refinery

Iran has brought on stream a $3.4bn gas refinery in its southwest Khuzestan region that runs on associated gas from nearby oilfields that until now has been flared, Iranian state media reported on January 21.

The launch ceremony for the plant in Bidboland was attended by Iranian president Hassen Rouhani via a video conference. At full capacity, it will process 56mn m3/day of gas, and produce 10.4mn metric tons/year of purified methane for injection into the national gas system.

The facility will also turn out 1.5mn mt/year of ethane, which will be used to produce petrochemicals at facilities in Mahshahr and Gachsaran. Iran is targeting a rapid expansion in its petrochemicals industry in the coming years, to add value to its resources and diversify its economy, which has been left reeling by the impact of US sanctions on oil exports.

A further 1mn mt/yr of propane and 0.5mn mt/yr of butane will be produced for export, while 0.9mn mt/yr of acid gas from the plant will be injected into oil wells at the Aghajari fields to boost reservoir pressure. It will also produce 0.6mn mt/yr of condensate and 0.5mn mt/yr of pentane plus. The latter will be used to develop 15,000 barrels/day of gasoline at a small-scale plant.

The project is expected to generate $1.5bn in annual revenues, including $700mn from exports, Iranian media said. The bulk of this investment was covered by the state-run National Development Bank and the rest by a syndicate of banks.

Iran is one of the biggest gas flarers in the world. Iranian oil minister Bijan Zanganeh said the plant would take care of 60% of Iranian gas that is now flared, with a further 15% taken care of by a facility in Marun. By 2023, Iranian flaring will near zero, he claimed.

Zanganeh said the Bidboland plant's success was testament to "the failure of US sanctions and the maximum pressure campaign against the Iranian people." Former US president Donald Trump's sanctions regime has crippled Iran's oil industry, severely constraining its exports. These sanctions are set to be lifted, though, if incoming president Joe Biden chooses to resurrect the 2015 Iran nuclear deal.

Speaking at the ceremony, Rouhani lamented that Iran had not lived up to its gas export potential. Its South Pars gas field is part of the same structure as Qatar's North Field, where further expansion of gas production and LNG output is planned for later this decade.

"We are behind in gas exports. We should be one of the top five gas exporters in the world," he said. "The world is in need of Iran's oil and gas. We can become the region's hub in production and exports of electricity or gas."