Details of the flare-up shutdown program in the 14th government

According to Ashura News, citing Mehr News Agency, according to Article 48, Clause "A" of the Sixth Five-Year Development Plan Law, the government is obligated to implement plans for the collection, containment, control, and utilization of gases associated with oil production and flares in all oil fields and oil industry facilities, and to contain and control 90 percent of flare gases by the end of the Sixth Development Plan.

The Ministry of Oil has also taken steps in this regard, including defining plans for the sale and auction of flare gases (in the form of short-term plans) and constructing NGL units and facilities for collecting these gases (in the form of long-term plans). However, during the years of implementation of the Sixth Development Plan Law, the measures taken have only led to the collection of 431 million cubic meters per day of flare gas (equivalent to 522 million cubic meters per year), which indicates a 5 percent performance of these plans.

The collection and organization of flare gases faces challenges and obstacles. The most important of these obstacles include the lack of financial attractiveness of the projects compared to other projects of the Ministry of Oil, the absence of an incentive-punitive approach for the subsidiaries of the Ministry of Oil, the lack of effective participation of the private sector, and the lack of appropriate infrastructure in this area.

But now it seems that the collection of flare gases has become more serious than in the past, because Houshang Fallahtian, former Deputy Minister of Oil Planning, said in an interview with Mehr reporter regarding the collection of flare gases: The timing of the collection of flare gases is until the end of the 14th government, and accordingly, plans have been made so that its investors have been assigned tasks and more than a third of flare gases will be included in the value chain by the end of the year.

He continued: "Based on the plans made, another third by the end of 1404 and another third by the end of 1405 or the beginning of 1406, the majority of flare gases that can be collected have their plans prepared and the investors have also been identified. What remains are a small number of fields whose investors are being selected through a tender."

Falahatian continued: The plans that were made by the previous government will be strictly followed up in the 14th government, and by the end of the year, we will witness the collection of one-third of the flare gases, and another third in 2025, and the remaining flare gases that can be collected will be in 2026. I hope that, given the seriousness of the issue, the Islamic Consultative Assembly has imposed penalties on the subsidiaries of the Ministry of Oil, so that if they do not collect the flare gases, they will have to pay heavy fines. Therefore, the National Oil Company and its subsidiaries are seriously pursuing these projects, and by the end of 2026, most of the flare gases will be collected.

Falahatian noted: Flare gas exists in oil and gas fields and in gas refineries, but the volume in oil and gas fields is far greater than the volume in refineries. Therefore, according to the plans made by the end of the 14th government, flare gases that can be collected will be collected.

The Deputy Minister of Oil Planning in the 13th government noted: Some flare gases are process and operational, for example, a refinery that is operating sometimes needs to discharge this gas once in the system for an hour to prevent an explosion, and because this gas is not permanent and is not economically viable.

All oil officials agree on the collection of flare gases, as Hassan Abbaszadeh, CEO of the National Iranian Petrochemical Company, said in this regard not long ago; there have been and are many flares in the areas of West Karun, East Karun, Dehloran, and Ilam for years. The petrochemical industry has made a good investment in collecting flare gases and extinguishing them. Maroon Petrochemical has spent about $400 million in this regard.

Stating that the Persian Gulf Bidboland Gas Refining Company has also spent $1.1 billion to collect flare gases, which will provide part of the feed for Bandar Imam Petrochemical and Gachsaran Petrochemical, he said: This year, in addition to 14 flares being extinguished by the efforts of the Persian Gulf Bidboland, the NGL 3100 unit will also be put into operation in the Dehloran region.

Managing Director of the National Oil Company: 14 to 15 million cubic meters of flare gas will be extinguished by the end of next year

Hamid Bord, CEO of the National Iranian Oil Company, promised to collect flare gases by the end of 1404 and stated: "A major part of the projects for collecting associated petroleum gases in the oil industry have been inaugurated, so that the NGL 1200 associated petroleum gas collection project has now been completed and its second phase will be put into operation in the coming months."

He continued: "By the end of next year, between 14 and 15 million cubic meters of associated petroleum gas will be collected daily in the country from new projects."

Ibrahim Parman, CEO of the National Southern Oilfields Company, also recently said regarding the collection of flare gases that good measures have been taken in the Masjed Soleiman Oil and Gas Production Company, the most important and prominent of which is in the Haftkal field.

Sekhavat Asadi, CEO of the Pars Special Zone Organization, pointed out that previously we had between 12 and 13 million cubic meters of gas flaring per day, which has decreased to 8 million cubic meters today, and said: "Given the government's emphasis on reducing gas flaring, the gas complex is implementing a 200 million euro project that has made about 60 percent progress in the two parts of purchasing equipment and parts, and with the completion of this project, the amount of gas flaring will fall below 5 million cubic meters by the end of 1404."

Regarding the auctioning of another part of the associated gases, the CEO of the Pars Special Zone Organization stated: "Four companies won in this auction, which are going to process the gases and inject methane gas into the national network and deliver the other gases to other uses."

Selling flare gas to power plants is not economically viable for investors

These days, imbalance has become a hot topic, but unfortunately, nearly 72 percent of the country's fuel portfolio depends on gas, and if flare gases are connected to the gas network, it can compensate for part of this imbalance. Houshang Fallahtian told Mehr about this issue: Flare gas has the potential to separate its destructive elements and turn it into natural gas and put it in the national network. Therefore, an investment that collects flare gases and separates polluting elements will produce products that are partly natural gas and partly sulfur, and the elements that it separates can be sold in the capital market to heavy industries and those who do not want to pay a higher tariff.

Falahatian added: "But the discussion of whether flare gas should be used in power plants is different because the government provides the fuel that it provides to power plants, whether natural gas, diesel, or mazut, at very low rates. Last year, it was 75 Tomans per cubic meter, and this year, based on a decision made in the Cabinet of Ministers and Note 8 of the 1403 Budget Law, changes were to be made, but that price is still insignificant."

The former Deputy Minister of Oil Planning noted: "Therefore, the flare gas that is produced, from the perspective of being used in power plants, must first be sold to the National Gas Company, and then the investor must pay the cost price to the investor, and if the gas company wants to provide it to power plants at the government tariff, it is another issue that allocating gas to an investment that is collecting flare gases is not economically viable."

He added: "Given that flare gas can be converted into natural gas, it is a valuable element that the Ministry of Oil, on behalf of the National Iranian Gas Company, can purchase from investors at an economically viable price and use."

Referring to the intensive program for flare gases, Saeed Tavakoli, CEO of the National Iranian Gas Company, said: "The amount of this gas is small, but we have a plan for a small amount that will be partially reduced by the end of the year and we will reach the minimum possible output at refineries during a 4-year program."

According to this report, it seems that all those involved in the Ministry of Oil are determined to reduce flare gases to zero in less than two years.