Eric Watkins
Senior Correspondent
LOS ANGELES, Feb. 7 -- Japan Oil Engineering Co. (JOE), a subsidiary of AOC Holdings Inc., will provide consulting services for a project funded by the World Bank to reduce flaring of associated gas from Azerbaijan's Guneshli oil field and help the country's electric power plants burn natural gas instead of heavy oil and coal.
Operated by the State Oil Co. of the Azerbaijan Republic (SOCAR), Guneshli oil field produces 40,000 b/d of crude, according to the World Bank, as well as large amounts of gas that is now flared.
The field was discovered in 1958 and is expected to operate until 2030. It holds estimated reserves of 300 million tonnes of oil, 2 million tonnes of condensate, and 43 billion cu m of gas.
The oil and gas extraction is based on 12 operating offshore platforms, with nine wells producing only gas and 125 wells that produce oil and associated gas.
The World Bank's Guneshli Associated Gas Utilization Investment project is being undertaken to assist with the collection, compression, and transport of associated gas from the oil field for distribution and sale in Azerbaijan.
Under terms of its contract, JOE will provide SOCAR with a proposal for utilizing the surplus gas as a fuel for the country's gas-fired power plants and complete a technical feasibility study by June.
The idea is to transport the surplus gas by pipeline to shore then adjust the heating value of the gas so it can be fed into the gas pipeline that extends from Russia to Azerbaijan.
The project also aims to ensure that gas processing and distribution maximize the potential for gas replacement of heavy oil uses in local industry, power generation, municipal services, and households.
Utilization of the surplus gas for the generation of electricity is expected to reduce carbon dioxide emissions by 2.5 million tonnes/year. JOE will thus also conduct a study in collaboration with Natsource Japan Co. to see how this could be used to trade emission rights.