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ASSALUYEH, IRAN’S ENERGY CAPITAL

Wednesday, March 5, 2008

Seyed Javad Seyedpour 

A JOURNEY TO THE LAND OF BURNING SUN AND GAS

When the British technicians built Abadan refinery, there was a sign on walls which said, “No Iranian Allowed.” Oil nationalization put an end to that contemptuous situation and now achievements of Iranians who yearn to develop their country can be seen everywhere. South Pars in Assaluyeh region is just part of those achievements. The following report is a cursory glance at the situation in South Pars and Assaluyeh region.

First Phase: Development

On the southern part of Iran map there is an expanse of land some 30,000 hectares in area which is bound to the southern part of Zagros Mountains on the north, to the Persian Gulf on the south, to Kangan on the west and to Chah Mobarak village on the east. This is Pars Special Economic Energy Zone. The temperature is scorching and air highly humid. There is where the world’s biggest natural gas reserve is located.

The huge South Pars gas reservoir is situated at the Persian Gulf some 100-110 km off the Iranian shores. It contains 14,000 billion cu. m. of gas and 18 billion barrels of gas condensate, thus, accounting for about 8 percent of total gas reserves of the world. The field is shared by Iran and Qatar and has a total area of 9700 square kilometers. Iran has defined 24 refinery phases (to match 28 gas production phases) as well as many petrochemical complexes and related industries for the region. Some of the projects have been finished, some are underway and others are still being tendered or studied.

There is one production platform and 10 active wells in return for every refinery phase, which take gas and condensate along with sea water from South Pars reservoir through a 36-inch pipeline to Pars Special Economic Energy Zone. Therefore, about one billion cubic feet gas, or 6.28 million cubic meters, enters every refinery phase to produce an average of 25 million cubic meters of sweet gas for household and urban consumption. Each phase of the field produces an equivalent of 40,000 barrels per day of condensate and 200 tons of sulfur. In addition, phases 4 and 5 produce ethane as well as liquefied petroleum gas (combination of propane and butane) in liquid form.

Each refinery phase fetches the country about 5 million dollars a day and given 5 refinery phases that have been activated thus far, they are fetching the country 25 million dollars in total benefits. It is projected that if other phases of South Pars gas field come on-stream, the country would be earning more than 40 billion dollars in benefits.

Phases 6, 7, and 8 of South Pars gas field which are being completed through investments by an Iranian company are to produce a daily amount of 100 million cu. m. of sour and dry gas per day in addition to daily production of 158,000 barrels of condensate and annual production of 6.1 million tons liquefied petroleum gas for exports. The sour gas produced by those phases is taken through a 56-inch pipeline over a distance of 512 km to Aghajari oil field for injection into the field in order to increase its recovery factor. Many experts maintain that gas injection is the best existing policy to raise recovery factor of oil fields because in addition to boosting production from oil wells, the injected gas will allow next generations to exploit those wells.

Phases 9 and 10 which are being developed by a foreign and two Iranian companies have been considered to produce 50 million cu. m. of natural gas per day and 80,000 barrels per day of gas condensate as well as one million tons ethane per year, 1.05 million tons liquefied petroleum gas per annum and 400,000 tons of sulfur per day.

Development of phases 6 through 10 has been somehow delayed and Dr. Seyed Abdoljalil Razavi, managing director of Pars Special Economic Energy Zone has announced that they will become operational by late September 2008.

Phases 11 to 24 are going through preliminary steps including identification of contractor, holding tender bid, or early studies. Apart from the 24 refinery phases in Assaluyeh, construction of related industries like petrochemical as well as downstream industries, marine industries, mixed industries, and semi-heavy industries is also underway.

Some 23 huge petrochemical complexes along with accessory installations needed to use products of various phases of South Pars gas field are being built. The 4th methanol, sixth methanol, fourth aromatic, fourth ammonia and urea, ninth and tenth olefin, and ethane production plans are among those plans which have been either finished or are currently underway. For example, the fourth aromatic project, which is considered to be the world’s biggest aromatic project, is being implemented over an area of 61 hectares to produce 1.28 million tons of aromatic products per year. Those products will constitute raw materials which are to be used for production of polyesters, synthetic fibers, pharmaceuticals, pesticides, paints, ethyl benzene, and phenol.

Another project which is being seriously followed by Pars Special Economic Energy Zone Organization is development of huge North Pars gas field, which is totally located on the Iranian territory. This region is located 40 km from South Pars gas field over an area of 16,000 hectares. Dr. Razavi, managing director of Pars Special Economic Energy Zone Organization has told reporters that, thus far, 1200 billion rials worth of tender bids have been offered on North Pars and early agreements have been reached with a Malaysian company. He added that development of North Pars will officially begin on April 1, 2008. Asked whether operations in North Pars were not possible to slow down operations in South Pars, the managing director noted that this would not happen, but facilities in South Pars will accelerate operations on North Pars.

Referring to a proposal by Ministry of Petroleum to the president that a South Pars investment fund should be established, he added that the president has given the green light on the proposal, saying, “We hope that the fund will channel national capitals toward oil and gas industry.”

As to the effect of the sanctions enforced against Iran pursuant to the United Nations Security Council resolutions, the official stated that the sanctions nagged the Iranian oil and gas industry, but failed to disrupt ongoing projects.

Our efforts to bring prosperity to Assaluyeh have been accelerated and it is hoped that various parts of this huge industrial complex will gradually come on-stream. This small part of the Iranian territory will boost every field of economic activities in the country.

Second Phase: Development and Conflicts

Development and conflict have gone hand in hand in developing countries. In this way, some parts of their territory which has enjoyed rich oil and gas and other natural resources thrived like a mushroom while in a short distance from those regions, families were living in extreme poverty. Therefore, lawmakers decided to think about reducing underdevelopment in such areas. Construction of many roads and other utility projects that have been implemented in Assaluyeh region has been done along the same lines. Based on current projections, some 4200 billion rials will be invested in developing infrastructures and 120 billion dollars will be also spent on utility projects by Pars Special Economic Energy Zone during the coming Iranian year (to start March 21, 2008) along. Major projects that have been implemented in this region include 43 projects from fiber optic project of Site 2 to fueling dock, and from a belt road to gymnasium, cargo and passenger terminals, flood control canals, fresh water supply, schools and high schools, highways, parks, teachers’ house, Payam Nour University, laboratory, library and coffee net.

Also, Kowsar pipeline will soon supply all villages in the region with healthy drinking water and based on current projections, problems with power supply will be solved soon. Completion of a highway running from Dayyer to Bushehr (North Pars Highway), and building a new airport for Bushehr will be done in North Pars area. Another project to be implemented next year is building a new railroad running from Shiraz to Bushehr and from Bushehr to Assaluyeh. The population in Pars Special Economic Energy Zone is expected to hit one million in a few years and most villages there will turn into cities. Workers and technical officials are not longer living in caravans, but in apartment blocks. Hotels, banks, clinics and hospitals, service complexes, stores, restaurants in addition to a big international airport have transformed Assaluyeh from a small village on the margin of Iran’s sea border with Persian Gulf to a big city and an unrivaled industrial and energy hub in Iran and the Middle East. However, more patience is needed before all plans bear fruit.

طراحی و توسعه آگاه‌سیستم