Iran gets first ever offer for associated gas sale

A French firm has offered to purchase associated gas from an offshore Iranian oilfield in the Persian Gulf to convert it into LNG, Iranian Oil Minister, Bijan Zangeneh has said.

The proposition marks the foremost of its kind to Iran by a foreign company to use natural gas associated with oil production instead of burning it off as the country often does in a practice known as flaring, National Iranian Oil Company (NIOC) said in a press release.

Pointing to finalization of the proposition, approximately 25% of flaring at the Forouzan platform will be stopped, Zangeneh said keeping the French firm incognito.

The French company has offered to partner with Iranian firms for processing the associated gas from Forouzan oil wells at a separate platform which they plan to build nearby before converting it into the liquefied natural gas (LNG).

Iran planned to pump the associated gas from the Forouzan field, which it shares with Kuwait, by pipeline to an LNG facility at Kharg Island before intensified sanctions prevented the scheme from taking off.

Ministry of Petroleum figures manifest nearly 5.4 million cubic meters (189 million cubic feet) of associated gas is burnt off every day at the Forouzan platform.

According to NIOC, the deal with the French company would cut Iran’s flaring of the associated gas in the offshore Persian Gulf fields by a quarter.

A possible deal comes in the wake of intensive negotiations held in recent months for the sale of associated gas, with the talks reportedly stuck over the period of the contract.

The overall associated gas from the offshore Persian Gulf oil wells is estimated at 20 million cubic meters per day, which equals the flow from a single phase of the giant South Pars field.

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