EghtesadOnline: The National Iranian South Oil Company and Petro Gohar Farasahel Kish Company have signed a non-disclosure agreement, based on which the latter will develop oil storage infrastructure in Ahvaz oilfields in southern Iran.
The agreement, signed by NISOC Managing Director Bijan Alipour and PGFK's CEO Mohammad Taqi Sadatipour obliges PGFK to build oil storage units in three oilfields, namely Ahvaz-2, Ahvaz-3 and Ahvaz-5, Shana, Oil Ministry's news portal, reported.
The initiative, which follows the engineering, procurement and construction (EPC) terms of contracts, will commence by the summer end and is slated for completion in two years.
Direct and indirect costs of the plan are estimated at of $300 million, Financial Tribune reported.
According to Alipour, the plan is aimed at increasing the fields’ current output at 320,000 barrels per day to 362,000 bpd in the period.
"The plan also envisages preventing the reduction of 35,000 bpd of crude in the three fields," he said.
The tasks assigned to PGFK involve the installation of wellhead and submersible pumps, drilling and maintenance of six wells, laying the pipelines, extending technical support and maintaining oil production and desalting units, in addition to the purchase, installation and maintenance of turbines.
PGFK is one of the advanced drilling companies within Iran’s oil and gas industry in terms of delivering offshore services. The company is currently active in the development of phases 13 and 22-24 of the giant South Pars Gas Field in the Persian Gulf.
Ahvaz Oilfield, located in Khuzestan Province, holds 18 billion barrels of recoverable oil reserves and ranks as the eighth biggest onshore oilfield in the world.
The field is owned by National Iranian Oil Company and operated by its subsidiary, NISOC.
--- Oil Storage Venture
Alipour said the venture is the first deal in line with NISOC's bid to develop 28 oil storage units in its operational oilfields.
"NISOC has envisaged the construction of units with the help of domestic contractors," he said.
The official put the estimated cost of the mega project at $4.6 billion.
"Six other tenders are being held, the results of which will be announced soon," he added.
Alipour noted that all the contracts will follow the EPC model, based on which all the procedures, including the design, procurement, development and construction, will be assigned to contractors.
"This will create a number of job opportunities in the oil-rich region," he said.
Currently, NISOC is Iran's biggest oil producer. The company's oil output stands at 3 million barrels per day.
NISOC is producing about 83% of all crude oil and 17% of natural gas produced in Iran and ranks as the Iran's biggest oil company.
The company’s reserves portfolio include Ahvaz Field. It is also in charge of onshore giant oilfields, including Gachsaran, Marun, Bibi Hakimeh, Rag Sefid and Aqajari. It also focuses on onshore upstream activity in the province of Khuzestan.
Iran aims to build new oil storage and loading infrastructure along its southern coast. The bulk of Iran's crude exports are made from Kharg, an island terminal off the Persian Gulf.
The country pumps close to 3.8 million barrels of crude oil and condensate, a type of ultra light crude, with export at more than 2.5 million bpd.
On the sidelines of the signing ceremony, Sadatipour referred to Persian Gulf Star Refinery, the country's largest oil refinery, in the southern city of Bandar Abbas, Hormozgan Province.
According to Alipour, once the refinery becomes fully operational in the next fiscal year (March 2019), the country will be able to export up to 20 million liters of gasoline per day.
"While we had to import 60 million liters per day of gasoline last year, the [partial] implementation of the refinery has made the country self-sufficient," he said.
Persian Gulf Star Refinery is being developed in three phases with a combined processing capacity of 360,000 barrels per day of condensate. The project is being conducted by domestic contractors, including PGFK.
Once fully operational, the refinery will produce 36 million liters of high-octane gasoline as part of efforts to wean Iran from imports of the fuel product.