Cold winter trims Iranian oil, petrochemicals output

Feb. 13, 2008
An unusually cold winter has cut production of crude oil and petrochemicals in Iran, reports FACTS Global Energy, Honolulu.

By OGJ editors
HOUSTON, Feb. 13 -- An unusually cold winter has cut production of crude oil and petrochemicals in Iran, reports FACTS Global Energy, Honolulu.

The chill has raised residential and commercial use of natural gas, diverting supplies away from gas-lift operations in Iranian oil fields and from petrochemical manufacture, says FACTS analyst Siamak Adibi.

Since early January, Adibi says, residential and commercial demand has represented 90% of total Iranian gas consumption of 15.67 bscfd and has been 18% higher than its level of a year earlier.

Gas has been cut off to reinjection projects in Parsi, Karang, and Kupal oil fields. Reinjection at Maroon oil field has dropped to 200-300 MMscfd from 900 MMscfd, Adibi reports.

Together, those fields had been producing 930,000 b/d of crude, about 512,000 b/d of it from Maroon field alone.

National Iranian Oil Co. (NIOC) had planned to raise gas reinjection in all of Iran's oil fields to 7.9 bscfd in 2010 and to 10.9 bscfd by 2015.

Some Iranian engineers believe the country's predominantly fractured-carbonate reservoirs will require more gas reinjection than that, Adibi says, noting that the overall decline rate for Iranian oil fields is 9-11%/year.

"Many industrial projects such as gas-based petrochemical plants at Assaluyeh have no production because gas supply has been temporarily halted to meet the increased demand from the residential and commercial sector," Adibi says. "NIOC has also cut LPG supply to petrochemical projects."

Gas processing plants fed by gas from Phases 4 and 5 of giant offshore South Pars gas field have cut LPG exports and moved the gas into the national grid.

Iran has halted pipeline gas exports to Turkey, to which it had committed 970 MMscfd. Late last year it trimmed the exports to 140-180 MMscfd.

"Turkey will have a serious gas shortage if the Iranian supplies are not resumed," Adibi says.

The Iranian government has blamed the gas shortage on a reduction in imports from Turkmenistan related to price disputes.

But Adibi notes that the Turkem problem should have affected only northeastern cities in Iran and says, "This shortage, which has covered the whole country, has been caused by a failure in network management."

Adibi attributes the problem to conflicting gas requirements for gas reinjection in projects managed by NIOC and for rapidly developing downstream uses in projects managed by National Iranian Gas Co.