LNG 3100 Refinery to Be Built in Western Iran

A00581632.jpgTEHRAN (Fars News Agency) – National Iranian Central Oil Company (NICOC) Managing Director Alireza Zeighami Tuesday said the Gas and LNG 3100 Refinery would be set up in western province of Ilam.

He added the refinery would prevent the burning of associated gases of oilfields of Cheshmeh Khosh, Paidar, Paidar-e Gharb, Dalpari, Danan, Dehloran, and Azar by collecting them.

According to him, the refinery would supply some part of feedstock of Dehloran Petrochemical Complex.

Zeighami said the design and construction of LNG 3100 Refinery would last 36 months, costing 300 million dollars.

“The country will earn over nine billion rials (over $970,000) per day when the refinery becomes operational”, said the NICOC chief, adding the refinery would produce methane, ethane, LPG, and naphtha.

The official said 136 million cubic feet of gas would be injected into refinery.

“Iran LNG Company” Managing Director Ali Kheir-Andish said four European companies had voiced their readiness to participate in Iran’s LNG project and to purchase the commodity.

European states would need 100 million cubic meters of gas per day by 2010, said Kheir-Andish, adding four international companies from Germany, Spain, and Austria had expressed their preparedness to help implement LNG project and to buy liquefied natural gas from Iran.

“They are eager to make investments in gas producing projects in an attempt to meet their energy need,” said the official.

According to the plan, the LNG output would double every 3.5 years, said the managing director, adding the country would produce some 22 million tons of natural liquefied gas in 2015, 44 million tons in 2018, and about 88 million tons in 2022.

Kheir-Andish predicted that the first LNG package would be injected into market in 2010.

He said negotiations on the finding a financier for the “Iran LNG” project would continue until Dec. of the current year, adding some Asian and European groups had expressed their willingness to finance the project.

Iran has already signed a $585-million contract with an engineering consortium comprising of two Iranian companies and an Italian company to build a treatment or gas sweetening plant for the Iran LNG project.

APS Engineering, a small, private Italian engineering company that has worked for a variety of clients including Eni, the Italian oil and gas multinational, told the Financial Times it was the Italian company in the consortium.

This contract was awarded just days after the design plans for the plant were submitted to Iranian officials by another consortium, made up of a German company, Linde, Hyundai of South Korea, and Snamprogetti, an Eni subsidiary. The design contract was initially agreed as far back as 2002.

Royal Dutch Shell, French giant Total, and Spain’s Repsol have stakes in Iran’s other two main LNG projects, as well.

Manager of Total Christophe de Margerie said the giant energy group would press on with talks on Pars LNG, Iran’s first liquefied natural gas export terminal, a project which requires a $15 billion investment, adding Total would look at the political situation only once a deal is ready.

Paulo Scaroni, Eni’s chief executive, told the Financial Times that Eni had ‘no intention’ of pulling out of Iran.

Other companies are, however, taking a bolder stance when it comes to Iran LNG. Union Fenosa, the Spanish energy company, says its subsidiary, Socoin, was awarded a 32.5-million-euro engineering contract for Iran LNG in August.

OMV, the Austrian oil and gas company, in April signed a preliminary agreement with Tehran for a stake in Iran LNG, but this is yet to be finalized. “Our interest in the Iran LNG project lies on the table,” it said.

E.ON, the world’s largest utility, seeks to buy liquefied natural gas from Nigeria, an E.ON manager told Westdeutsche Allgemeine Zeitung.

Dietrich Gerstein, head of E.ON’s LNG purchasing unit, said E.ON was interested in natural gas from Iran.

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