Iran started exporting condensate — a form of ultra light oil — from two newly launched phases of its giant South Pars Gas Field to Japan.

Managing Director of National Iranian Oil Terminals Company (NIOTC) Pirouz Mousavi was quoted by Press TV as saying that the Japan-bound consignment contained 160,000 barrels of condensate from South Pars phases 20 and 21.

He added that a 300-ton Japanese vessel had lifted the consignment from phases 20 and 21 as well as another from phases 2, 3, 4 and 5.

He did not specify how much had been loaded from other phases but it could stand at several hundred of thousands of barrels.

Mousavi added that the vessel — named ‘Fujikawa’ — was also to load 650,000 barrels of crude oil from Iran’s Forouzan oilfield before leaving for Japan.

Iran announced in December that it was already expanding the market for its condensate, which can be used to make both fuel and plastic.

Masoud Hassani, the managing director of South Pars Gas Complex, told the domestic media at the time that the country had sent its first cargo of one million barrels of condensate to Europe.

In September, indications grew that condensate had already found a special position in Iran’s exports.

The media quoted officials as saying at the time that exports of the ultra-light oil over a period of five months from March 21, 2016 stood at above seven million tons, showing an increase of 76 percent compared to the figure for the same period last year.

South Korea is a key importer of Iran’s condensate. In June, Reuters reported that the country’s imports of condensate from Iran could reach a record level of six million barrels — or 200,000 barrels a day – over the month.

Reuters said it had used figures provided by traders to make the estimate given that South Korea does not provide separate data on imports of condensate.

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Spokesperson of National Iranian Gas Company (NIGC) said Iran-Iraq gas pipeline will be unveiled on Tuesday though exports to the neighboring country will still remain in a halt.

NIGC Spokesman Majid Bujarzadeh made the remarks emphasizing that Iran is ready to inject gas into the export pipeline asserting “the Iraqi side is still unprepared to receive Iran’s natural gas.”

Earlier, Iranian Deputy Oil Minister for International Affairs Amir Hossein Zamaninia had explained that the pipeline for gas exports to Baghdad was replete with natural gas though Letters of Credit (LCs) first needed to be opened for the process to be resumed.

He noted that banking issues had to be fully resolved before Iranian gas could be deployed to Iraq stressing that “a letter of credit is a letter from a bank guaranteeing that a buyer’s payment to a seller will be received on time and for the correct amount.”

A part of the sixth national pipeline, which aims to conduct gas exports to Iraq, will be inaugurated in coming days while exports will still remain in a hiatus.

NIGC Managing Director Hamidreza Araghi will attend the unveiling ceremony on Tuesday and the second part of the sixth national pipeline with a length of 600 kilometers is still under construction.

The sixth national gas pipeline network has the capacity to carry 110 million cubic meters per day through which natural gas would be exported to Iraq and Syria.

National Iranian Gas Company and the Iraqi Ministry of Electricity and Power signed a gas contract in 2013 and it was in 2016 that an extension was added to the deal in order to increase its volume and duration.

Accordingly, gas exports will begin at seven million cubic meters per day and is scheduled to reach the highest level envisaged in the contract after 21 months. As such, in hot seasons 35 and in cold ones 25 million cubic meters of natural gas will be deployed to Baghdad region yielding an aggregate total of 10 billion cubic meters per year.

The deal for gas exports to Basra was also inked in 2015 as the second oil sale agreement to Iraq according to which 35 and 25 million cubic meters of natural gas will be exported to the Iraqi region in hot and cold seasons, respectively.

With nearly three years after signing of the gas contract between Iran and Iraq, gas exports to the neighboring country has faced standstills and delays mainly due to activities of ISIL terrorist group activities and also because of Iraq’s non-compliance to fulfillment of contractors’ financial claims.

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The operator of phases 20 and 21 of the super giant South Pars Gas Field says phase 21’s platform is currently recovering 27 million cubic meters of natural gas per day, saying the platform is faced with no restrictions in supplying gas to onshore refining facilities.
Alireza Ebadi said one third of the gas recovered from phase 21 is being processed at the refining facilities of phases 20 and 21 and the rest is being sweetened at the refineries of phases 15 and 16 of the gas field.

Once the third train of the phase 20&21 refinery comes online, all the gas recovered from the phases will be processed at the facility for injection into the national gas trunk-line.
The second train o the refinery will come online within the next few months, Ebadi said.

Phase 20 and 21 of the South Pars are being developed for production of 50 mcm/d of sweet gas as well as 75,000 b/d of gas condensate, 400 tons of sulfur and 1.5 million tons of liquefied petroleum gas and a million tons of ethane per annul.

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An NIOC official announced that new shale gas reserves have been discovered in west Iran exploration blocks.

Over the past four years, the market for shale oil and shale gas has taken off across the globe to the extent that the US has begun shale production which is an unconventional oil produced from oil shale rock fragments by pyrolysis, hydrogenation, or thermal dissolution.

Shale oil and gas extraction has reached a level in the US that the American president-elect Donald Trump is after independence in energy sector during his office and he is expected to issue orders on facilitation and acceleration of production from hydrocarbon reservoirs.

What’s more, in the past two years, certain OPEC member states, Saudi Arabia in particular, have manipulated prices paving the path for a plunge in global crude prices under the pretext of preventing further development of shale oil and gas resources in the world.

In the meantime, Iran has also joined the supporters of shale oil and gas as the National Iranian Oil Company (NIOC) has so far defined four study projects in an attempt to discover shale reserves in Lorestan province and South Zagros region.

Mahmoud Hajian, National Iranian Oil Company (NIOC) Exploration Directorate, said implementation of research project to identify and study gas shales as unconventional hydrocarbon resources has begun in Lorestan province and the Zagros basin.

“The project, which will hopefully yield promising outcomes, is being carried out by Research Institute of Petroleum Industry for the first time in Iran,” highlighted the official asserting “the research project comprises four phases the second of which is being implemented as well as that existence of shale gas resources has been certified.

Hajian further noted that another relevant project in Lorestan region has been defined in the form of two phases which are 66% through and will be accomplished within nine months.

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National Iranian Oil Company (NIOC) has affirmed adequacy of 29 international oil and gas companies willing to put in tenders for Iran’s upstream oil sector.

NIOC intends to invite several rounds of tenders for a number of oil exploration & production (E&P) projects; accordingly, credible and qualified foreign E&P firms were asked to participate in the competence evaluation process.

Conformity assessment documents and related information, including evaluation methods, criteria and procedures were placed on the official website of NIOC on October 17, 2016.

Applicants were required to submit a copy of demanded documents along with electronic files as long as December 04.

According to NIOC official website, secretariat of tenders for upstream oil and gas sector contracts, upon receiving information from interested companies and evaluation of documents, promulgated names of 29 accredited foreign firms.

The final list contains names of prominent oil giants from Germany, France, Italy, Norway, Malaysia, Russia, Austria, Thailand, Japan, Poland, the Netherlands, Britain, Spain and China among the others.

So far, numerous Memoranda of Understanding (MoUs) have been inked with foreign companies for development of oil and gas fields though the first international tender in Iran’s oil industry is scheduled to be invited in coming months for expansion of South Azadegan field.

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Iran has increased its sales of crude oil as well as gas condensates to global energy giants Shell and BP.
Director for International Affairs of the National Iranian Oil Company (NIOC) Mohsen Qamsari was quoted by Press TV as saying that Shell and BP had purchased two to three consignments of oil from Iran over the past few months.

Each consignment, Qamsari added, comprises around one million barrels of oil.

The official added that the sales to the two companies had been conduct through spot contracts.

Qamsari further underlined that Iran expected to increase oil sales to Shell and BP in the near future through more spot contracts.

He added that talks were also underway with both companies on long-term sales deals.

Qamsari said that Iran’s average 2016 oil exports stood at around two million barrels per day.

Iranian media reported that the country’s current crude oil production was close to four million barrels per day — almost the same as before sanctions were imposed against the country in 2011.

Iran exports the bulk of its crude oil to Asian consumers including India, China, South Korea and Japan.

Figures released earlier this week showed that Iran’s oil exports to Asian clients had doubled in November compared to the figure for the same period last year.

A report by Reuters to the same effect showed that the four major Asian consumers of Iran’s oil had imported a total of 1.94 million barrels per day of oil from the country in November. The figure, the report added, was 117 percent higher than the amount for last year.

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Iran‘s gas can be exported to Europe via Georgia and the Black Sea in the near future, said head of Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA).

According to Fars News Agency, Gholam-Hossein Shafeie noted, “Cooperation between the two countries (Iran and Armenia) is of special importance in energy security and in the near future, Iran’s gas can be transferred to Europe via Georgia and Black Sea.”

Shafeie accompanied President Hassan Rouhani’s delegation during the three-nation tour of Central Asia, which included Armenia, Kazakhstan and Kyrgyzstan from December 21-23.

He said Iran and Armenia have in recent years been strategic partners in the region.

Iran and Armenia, he noted, can cooperate in the exchange of technical and engineering services as well as in energy, petrochemicals, power transfer, dam building, establishment of factories, mining, agriculture, tourism, particularly eco-tourism and health tourism, cooperation in a third country and cooperation between the small and medium-sized companies.

He suggested the transportation of Armenian goods to other countries, especially China, India and Southeast Asia, via Iran’s Persian Gulf ports.

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Managing Director of Pars Oil and Gas Company (POGC) Mohammad Meshkinfam said on Tuesday that South Pars gas output has risen by 140 million cubic meters marking a record output growth.

Meshkinfam said that since its operation in 1377 (1998-99) until end of (March 19, 2016) the last Iranian year of 1394 (2015-16), South Pars gas field’s total production capacity stood at about 879 billion cubic meters, earning the country 378 billion dollars.

He said gas production capacity of South Pars was about 285 million cubic meters a day in 1392 (2013-14) which will soon increase to 515 cubic meters a day once parts of phase 21 of South parts come on stream.

He said that gas production from South Pars will hit record high this year and the field’s output capacity will reach 140 million cubic meters by March 19, 2017.

‘Up to so far, 95 million cubic meters of the figure has been met.’

Meshkinfam said that 91 billion dollars investment should be made for development of all phases of South Pars : 31 billion dollars in project for development of the operational phases and 61 billion dollars for the phases under construction.

Some 21 billion dollars out of the said sum should be invested in South Pars by next two years, he said.

The official said the field’s earnings are four times the sum of investment.

‘In 1394 (2015-16), about 131 billion cubic meters of gas were extracted and the value of the gas and related products produced was 46 billion dollars. The budget proposed for South Pars in 1395 (2016-17) was about six billion dollars and within nine months since start of this Iranian year (March 20), about for billion dollars investment was made.’

By end of this year, all phases of South Pars, except phase 11, will be completed and thus far, 10 refineries have been operational in South Pars and three more are to be built.

The POGC Chief said 258 out of 415 wells and 25 out of 40 platforms due to be operational in South Pars.

He predicted that with completion of a number of half-finished phases, gas production in South Pars will increase between 540 and 550 billion cubic meters by end of this year.

‘Now, daily 600,000 barrels of gas condensates are produced in South Pars and the figure will reach 680,000 barrels by end of this year.’

Elsewhere in the press conference, Meshkinfam said a French company is now serving as international consultant studying pressure drop in South Pars wells and based on the outcome of the study, operations will start to design and construct pressure drop platforms.

‘A contract, that will be signed with French Total for development of phase 11 of South Pars gas field, envisions construction of platforms to check the pressure drop.’

He said Total is going to transfer know-how with construction of the pressure drop platforms to Iran.

‘A model Total uses to check pressure drop in phase one is going to be followed and used in development of other phases.’

He noted that Total envoys have visited the platform construction companies in Iran.

He said Total is to be rewarded for partnership in development of phase 11.

‘The award is envisaged for 20 years in proportion with increase or decrease in the production.’

On conclusion of deal with Indians for development of Farzad B gas field, he said that National Iranian Oil Company follows up the matter.

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The National Iranian South Oil Company has signed its first non-disclosure agreement (NDA) with a consortium of international companies, known as Pergas, for carrying out studies over two oilfields in Iran.
The consortium comprises 11 European, Canadian and Asian firms as well as the Sharif University of Technology and has signed the NDA for holding studies on Karanj (Asmari, Pabdeh, and Khami oil deposits) and Shadegan oilfields (Asmari and Bangestan reserves).

Based on the deal, the consortium will have 6 months to hand over the result of its studies on the fields to the NISOC. Pergas may submit its proposal for development of the fields sooner if it is ready.
Minister of Petroleum Bijan Zanganeh has spent a long time on investigation of the framework of NISOC’s new framework of oil contracts.

Over 60 companies are currently in talks with the NISOC for cooperation with the company under the new framework of the contracts.
The deals consider development of four fields of Parsi, Karanj, Rag Sefid and Shadegan, including nine oil reserves, are specified for development based on the contract after announcement and confirmation of the Minister of Petroleum.

The nine reserves include Asmari, Pabdeh and Khami in Karanj field, three reserves in Asmari, Bangestan and Khami in Rag Sefid field, Asmari field in Parsi field and two reserves of Asmari and Bangestan in Shadegan field.
The four fields were selected for the purpose due to the recovery coefficient, enhanced recovery and integration of the reserves.

NISOC contracts are part of a basket of contracts that is operational in nature, while its purpose is development of reserves and using enhanced recovery methods./Shana

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A consortium of Indian companies led by ONGC Videsh (OVL) is set to strike a deal with Iran by January for the development of Farzad-B gas field in the Persian Gulf.

 Iran to become the biggest oil supplier to India

This comes at a time when Iran surpassed Saudi Arabia to become the biggest oil supplier to India in October, after sanctions on the former were lifted in January. According to a Reuters report, in October this year, supply from Iran increased to 789,000 barrels a day (bpd), compared with Saudi Arabia’s 697,000 bpd, business-standard.com reported.

Farzad B gas field, Persian Gulf

“Our relationship with Iran is strategic and long-standing. As far as the Farzad project is concerned, financial issues will be sorted out and we will finalize the deal by January. We have already appointed a consultant for that,” said an official close to the development.

Though India had shown interest in the project long back, sanctions by the United States and other Western countries on Iran delayed things. Farzad-B has gas field has reserves of about 21.6 trillion cubic feet.

Managing Director of Pars Oil and Gas Company, which is in-charge of the project, Mohammad Meshkinfam told the Iranian media that it deemed the “economic development model” was the main basis of disagreement between both the countries. “In case no agreement is reached within the envisaged time, the development of Farzad-B will be put to international tender,” he said.

Under Petroleum Minister Dharmendra Pradhan, India has focused on countries such as Iran and Russia for sourcing of hydrocarbons. In the recent past, India had invested about $4.25 billion in Russia only.

A consortium led by state-run Indian Oil Corporation, Oil India and Bharat PetroResources had signed a $1.3-billion deal in Russia for a 29.9-percent stake in the Taas-Yuriakh oilfield in March. Later, the consortium also struck a $2.02-billion deal for 23.9 percent in Rosneft’s Vankor field.

According to the Petroleum Planning and Analysis Cell, India imported 202.85 million tons of crude oil in 2015-16, up from 189 million in 2014-15.

About: Farzad B gas field, Persian Gulf

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