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Iran gets first ever associated gas offer

US Rep. Ilhan Omar (D-MN) (L) talks with Speaker of the House Nancy Pelosi (D-CA) during a rally with fellow Democrats before voting on H.R. 1, or the People Act, on the East Steps of the US Capitol on March 08, 2019 in Washington, DC. (AFP photo)
Smoke from a gas flare at the Forouzan platform blankets the area.

A French company has proposed to buy associated gas from an offshore Iranian oilfield in the Persian Gulf in order to convert it into LNG, Minister of Petroleum Bijan Zangeneh says. 

The offer marks the first of its kind to Iran by a foreign company to use natural gas associated with oil production instead of burning it off as the country often does in a practice known as flaring.

With the finalization of the agreement, nearly 25% of flaring at the Forouzan platform will be halted, Zangeneh told Channel 1 of the national television without naming the French company.

The Fars news agency said the French company has proposed to partner with Iranian firms for processing the associated gas from Forouzan oil wells at a separate platform which they plan to build nearby before converting it into the liquefied natural gas (LNG).

Iran planned to pump the associated gas from the Forouzan field, which it shares with Kuwait, by pipeline to an LNG facility at Kharg Island before intensified sanctions prevented the scheme from taking off.

According to Ministry of Petroleum figures, about 5.4 million cubic meters (189 million cubic feet) of associated gas is burnt off per day at the Forouzan platform.

The deal with the French company would cut Iran’s flaring of the associated gas in the offshore Persian Gulf fields by a quarter.

A possible deal comes in the wake of intensive negotiations held in recent months for the sale of associated gas, with the talks reportedly stuck over the period of the contract.

The overall associated gas from the offshore Persian Gulf oil wells is estimated at 20 million cubic meters per day, which equals the flow from a single phase of the giant South Pars field.  

Beside the energy loss, the flaring of associated gas significantly harms the environment.

Iran holds the first largest natural gas reserves and fourth largest oil reserves in the world.

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