Page 61 - IRANRptNov19

Iran’s flagship refinery ‘producing 20mn litres/day of Euro-5 fuel’
South Pars oil layer to be developed by Iranian firm
Kharg Island terminal or by land at the Tabriz Refinery.
NIOC offered 2mn barrels of gas condensate on June 3 at $67.14 per barrel, with the minimum purchase noted at 1,000 barrels.
The amendments to the purchase and payment terms are nothing new. An amendment to the Iranian budget was approved on February 17, requiring the Ministry of Petroleum (MoP) to offer 2mn barrels per month of light crude on IRENEX. This came in addition to the 2mn barrels of heavy crude oil and 2mn barrels of natural gas condensates and natural gas the ministry was already obliged to supply to the exchange.
With the response from buyers muted, Fars News Agency quoted Assadolla Qarekhani, a member of the Majlis Energy Commission, as saying that Parliament had agreed that more needed to be done to entice buyers.
In early August, National Iranian Oil Products Distribution Co. (NIOPDC) offered 18,000 tonnes of gasoline on IRENEX, with 5,000 tonnes sold for export to Afghanistan, Armenia and the Kurdistan Region of northern Iraq. NIOPDC offered another 10,000 tonnes of gasoline on the exchange in late August, with 500 tonnes purchased by domestic buyers.
Iran’s flagship Persian Gulf Star Refinery (PGSR) is by now producing 20mn litres/day of Euro-5 grade fuel, official energy news agency Shana has reported.
During the previous sanctions era, Iran was in 2013 caught short when the importing of fuels was blocked as it did not produce enough petrol and diesel to meet domestic needs. PGSR was subsequently built as insurance against a recurrence of the situation should the country face another wave of sanctions, which it duly did from mid-2018 after the US unilaterally walked out of the 2015 nuclear deal.
Mohammad Ali Dadvar, CEO of the refinery, said that the facility was now producing some 450,000 barrels of gas condensate. He added that PGSR was capable of producing 47mn litres/day of Euro-5 grade fuel.
With Tehran struggling to attract foreign operators, the National Iranian Oil Co. (NIOC) has announced that it will award the development contract for the South Pars oil layer to a domestic firm.
NIOC’s director of integrated planning, Karim Zobeidi, was quoted by Mehr News last week as saying that the selected company would proceed with the project under the integrated petroleum contract (IPC) model, which was introduced to replace the unpopular buyback contract in 2016.
He added that “Negotiations are also underway with domestic companies for the development of other fields such as Yaran and Sohrab.”
Zobeidi noted that IPC deals had been signed for projects to improve recovery from fields including Cheshmeh-Khosh, West and East Paydar, Sepehr and Jofair, adding that “with these contracts going operational the production capacity of the country’s oilfields will increase significantly.”
In January, Pars Oil and Gas Co. (POGC) managing director Mohammad Meshkinfam said that his company was in talks with several domestic oil and gas companies for the South Pars oil layer following the end of discussions with Denmark’s Maersk Oil.
Meshkinfam said at the time: “Since Maersk merged into Total, we stopped negotiations with the company due to the presence of Total on the Qatari side. At present, we are negotiating with some Iranian companies to develop the layers, with the negotiations being confidential,” he said.
NIOC has a target of producing 150,000 bpd from the currently producing reservoir.
61​ IRAN Country Report​ November 2019 www.intellinews.com