Investment opportunities in National Iranian Gas Company

Jun 28, 2015 12:00 AM

By: HEDAYAT OMIDVAR
Member of IGU Gas Advocacy Task Force (TF2), Head of Communication Affairs with Science & Research Centers, Research & Technology Dept., National Iranian Gas Company

Guidelines

The existence of about 34 trillion cubic meters of natural gas reservoirs in the Islamic Republic of Iran beside the other capabilities in the oil and gas industry and also the experience in continuous activities of this field for more than one century has made the National Iranian Gas Company as one of the most reliable active companies in the natural gas arena.

The existence of lots of advantages in Iran geopolitically, abundant reservoirs, necessary infrastructures being ready and the codification of the required laws and regulations in accordance with the development plans have provided the adequate conditions for the investment and participation of the international companies in the Iran’s gas industry and among them is the necessary preparation for the participation and investment in the natural gas production, transmission and underground storage sectors and also the sale and export of gas through the pipelines or as LNG and other commodities.

It is completely obvious that with the discovery activities related to the common energy carriers such as oil, coal, nuclear and solar energy etc. for at least next 40 years, the dominant energy will be supplied by natural gas. At the present time, the average consumption and production of this invaluable energy carrier has the required stability on the international level and its continuation is predicted and hence, the National Iranian Gas Company having followed the prevailing national viewpoint in the country is ready to participate and interact with all the active national and international companies in the natural gas industry.

A Glance at the NIGC Administration and Organization Staff

The National Iranian Gas Company is comprised of seven directorates and one VP as follows:

1-    VP of Operations

2-    Financial Affairs Directorate

3-    Planning Directorate

4-    Research and Technology Directorate

5-    Human Resource Development Directorate

6-    Gas Distribution Directorate

7-    Natural Gas Distribution Coordination and Supervision Directorate(Dispatching)

8-    International Affairs Directorate

 

In addition to the mentioned directorates, there are thirteen departments which directly report to the managing director as follows: Public Relations, Legal Affairs, Inspection and Complaint Consideration Affairs, Internal Auditing, Selection Kernel, Security, Assembly Affairs, Executive Affairs of Violation Investigation, Technical Inspection, Health, Safety and Environment (HSE), Information and Communication Technology, Commercial Expertise Affairs, and Structural Engineering Affairs.

The Subsidiary Companies of the National Iranian Gas Company

The National Iranian Gas Company is also comprised of 54 subsidiary companies that each of them is active in different fields of natural gas industry with independent directorates. These companies are as follows:

a) Provincial Gas Companies

At present, there are 31 provincial gas companies throughout Iran which are responsible for gas delivery to the cities, villages, power plants, industries and commercial centers.

b) Iranian Gas Engineering and Development Company

Iranian Gas Engineering and Development Company is one of the subsidiaries of the NIGC. Based on the executive system of oil industry projects, the company is responsible for the implementation of National Iranian Gas Company master plans. In terms of the volume of under implementation projects, the company is the biggest one in the NIGC and invests most of the credits.

The company is authorized to deal with the following tasks:

  • Carrying out economic and feasibility studies of the projects left to the company.
  • Carrying out fundamental and detailed engineering affairs and implementing all the projects left to the company.
  • Design, supervision and implementation of all the engineering and construction operations such as construction and development of oil and gas production, collection and transfer systems, wellhead facilities, processing plants and dehydration facilities, underground gas storage, transfer pipelines and gas supply, gas pressure booster and reducer stations and C.N.G, telecommunication systems, pumping stations, infrastructural and building tasks and kinds of marine structures and the related installations inside and outside of the country.
  • Performing the required material procurement operations to provide the goods from inside and outside of the country
  • Performing the scientific, technical, financial, commercial and service activities needed to develop the company operations.

c) Iranian Gas Transmission Company

The most important task of the company is receiving natural gas, Ethane, LPG and gas liquids from domestic and foreign production sources and transferring it to domestic production terminals and export terminals. The Iranian Gas Transmission Company is comprised of seven managerial districts and 10 operational zones. The company is responsible for operation management of about 36000 km gas pipelines all over the country.

d) Gas Processing Plant Companies

Gas Processing Plant companies act under the supervision of VP of Operations. The VP supervises and utilizes thirteen gas Processing Plant companies. It is projected that through implementation of the development projects by 2025, the number of the gas Processing Plant companies is enhanced and based on this prediction, the total gas Processing Plant capacity of NIGC will add up to 1200 Million Cubic Meters (MMC) per day, provided that all Processing Plant development projects are realized by 2025. The gas Processing Plant companies which work under the supervision of this directorate are as follows:

  • Bidboland I and Masjed Soleyman Gas processing plant with the capacity of 28.2 MMC per day
  • Parsian Gas Processing Plant with the capacity of 84 MMC per day
  • Ilam Gas Processing Plant with the capacity of 6.8 MMC per day
  • Fajr Jam gas Processing Plant with the capacity of 125 MMC per day
  • Sarkhun and Qeshm Gas Processing Plant with the capacity of 17 MMC per day
  • Shahid Hasheminezhad Gas Processing Plant with the capacity of 58.34 MMC per day
  • South Pars Gas processing Plant  with the capacity of 210 MMC per day
  • Bidboland II Gas Processing Plant with the capacity of 57 MMC per day that is expected to be launched soon.

e) Iranian Underground Gas Storage Company

Iranian Underground Gas Storage is one of the other major subsidiary companies of the NIGC established in February, 2008 aiming at building and maintaining balance between the natural gas production and consumption in specific circumstances (sudden temperature drop) and also organizing, expanding, developing and speeding up underground gas storage activities in Iran. The company is responsible for continuing the current projects and defining new projects. It started momentum for surveying and studying in various parts of the country to identify potential underground structures suitable for gas storage; and studied 220 reservoirs over a year. At present, Shoorjeh and Sarajeh gas storage tanks with an annual capacity of 4 BCM is operational and the Qaqdis, Yortsha, Nasr Abad tank and SaxtarKuh Ahmadi are under different phases of study and implementation.

Iranian Gas Distribution Company

In line with the implementation of Article 44 of the Iranian Constitution and line 7 of the National Iranian Gas Company subsidiaries entrusting agenda, a company named Iranian Gas Distribution Company including 31 provincial gas companies was founded responsible for the following activities.

1)    Reception, distribution, transaction and commission of natural gas regarding the related rules

2)    Maintenance and administration of the operations related to the secondary lines, gas feeding and distribution networks, pressure-reducing stations, measurement stations, cathodic protection and other installations and building related to the company activities

3)    Offering services to the natural gas applicants and subscribers, gas sale according to the contract and endeavor to promote the quality of before and after sale services to the customers

4)    Devoting effort to establish the research system and strengthen the relationship with the scientific and research centers in order to reach the scientific and technological innovations and their implementation to answer the company needs

5)    Transportation, warehouse keeping, marketing, distribution and selling of the products and services of other investment-receiving companies and individuals and legal persons who are active in the production and commerce fields

6)    Offering technical, managerial, executive and financial services to the other investment-receiving companies

 

f) Iranian Gas Commerce Company

Iranian Gas Commerce Company as one of the other NIGC subsidiary companies was established in 2008 in line with the macro objectives and policies to fulfill the following detailed tasks:

Commerce activities including marketing, purchase, sales, import, export, goods and equipment commissioning and some hydrocarbon derivatives including natural gas, Liquid Petroleum Gas (LPG), Liquefied Natural Gas (LNG), gas liquids, gas condensates, sulfur and other Processing Plant products

Carrying out goods-related tasks including warehouse keeping, customs formalities, and other relevant activities

Rendering technical and expertise services, goods technical inspection, updating and classifying goods, developing vendor lists and some other relevant activities

 

The NIGC Strategic Objectives

The NIGC major objectives can be surveyed in two different sections: national and international. In both sectors, the main principle is customer satisfaction and maximum productivity achievement. In line with this and based on the outlook document (2025 horizon), the NIGC aims at ranking the third among natural gas producers in the world to achieve 8 to 10 percent of the global gas trade share. The second objective of the NIGC is ranking the first in the region in terms of gas technology.

Plans and policies of the NIGC in international level and ranking the third in the world and achieving a share of 10 percent of natural gas trade in the world are as follows:

1-     Processing about 1200 MCM per day of natural gas

2-     Enhancing natural gas share in the energy basket of the country by 70 percent, through substituting liquid oil products for natural gas

3-     Increasing natural gas export to regional and international markets through pipelines and other methods

4-    Attracting foreign investment through capital markets and/or joint projects

5- Economic firms running vision and improving structure to maximize profitability and competition in international markets

6- Maximization of the added value through using gas in energy consuming industries and/or establishment of industries like GTL

7-Reinforcing private sector in downstream and gas distribution industries

8- Cooperation with the countries in the region in production and transmission affairs

9- Impressing gas management status in the region

10- Benefiting from natural gas adjusted pricing system

 

Iran’s special advantages to enter the global gas market:

•         The shortest route to global markets

•         Having the huge infrastructures for transferring gas abroad

•         The minimum required investment

•         Possibility of transit to Turkey, Europe and Persian Gulf region countries

•         Possibility of gas swap to the adjacent countries

•         Existence of potential major consumers

•         Owning 34 TCM proven gas reserves and ranking the first among gas owning countries

•         Ranking the third among producers that will rank the second in 15 years

•         Having necessary infrastructures for gas export and swap and transit to Europe, East Asia and Persian Gulf region countries

Pioneering investment opportunities

The private sector participation enhancement in carrying out the infrastructural projects of the Iranian gas industry has been one of the strategic approaches of the National Iranian Gas Company during the recent years.

In this regard, utilizing the capabilities of the domestic and foreign private sector in supplying the financial sources of the gas industry plans has created a new environment for the National Iranian Gas Company to interact with the private sector and has formed a win-win relationship for both parties. Along these lines, relying on its successful experiences in the joint investment with the private sector and trusting the reliable capabilities and capacities in this sector, the National Iranian Gas Company has offered a vast range of investment options for the energy field investors in several sectors of this strategic industry including processing, transmission, underground storage and distribution ones. What follows introduces some of the most important investment opportunities in the form of the National Iranian Gas Company plans and projects which are ready to attract the financial resources.

 

Specifications and Credit Estimation of the NIGC’s Investment Plans

Requirements for daily gas transmission one BCM in 2017

Explanation

Estimation

Capacity increase due to plan implementation (MCM per day)

300

(after full implementation of the plan)

Required credit estimation (million dollars)

(to construct around 2750 km of the 6th, 8th, 9th, 11th and new gas transmission pipelines with 56-inch diameter along Ahvaz-Dehgolan, Assaluye-Kuhdasht, Dehgolan-Miandoab, Site 1 &2 connector, pipeline along Parsian Processing Plant- 101st km of the 11th line, the new line, Assaluyeh-Ahvaz and the initial part of the 8th line, Bidboland-Tapaveh line and pipeline from the 5th and 8th trans-Iranian pipelines junction to Parchin-Semnan 48-inch line, 14 gas pressure booster stations with total power of 1400 Mega Watts, 5 pressure control stations, 2 operational yards, one metering station, 130-km, 48-inch pipeline along Kuhdasht-Charmaleh, 75-km, 36-inch pipeline along Kuhdasht-KhorramAbad and 34-km, 30-inch boosting pipeline of Sanandaj )

6326

Gas Distribution to Sistan-Baluchestan Province

Explanation

Estimation

Gas Consumption Volume (MCM per day)

Annually ( When Fully operational

1929

Required credit estimation (million dollars)

(For Construction of a 260-km, 36-inch  pipeline along Iranshahr- Zahedan, the  Khash 85 km, 16-inch  pipeline, the Iranshahr-Delgan junction 281 km, 56-inch  pipeline, the Chahbahar 60 km, 42-inch  pipeline, Zahedan-Zabol junction 80 km, 36-inch  pipeline, the Zabol 120 km, 20-inch  pipeline, networking for 202 thousand urban, and 82 thousand rural households of the Zahedan, Khash, Chabahar and Zabol cities and the conversion of the Iranshahr steam power plant)

1600

SangBast Gas Pressure Booster Station

Explanation

Estimation

Station location

Khorasan Razavi

Required credit estimation (million dollars)

73

Transmission Capacity

In 2016, about 2 MCM and from 2017 until the end of the period, around 5 MCM per day will be added to the transmission capacity

Explanation

The power of the station is 50 Mega Watts with a (1+1)  unit arrangement. The station is supposed to increase the gas reception capacity from Turkmenistan and also distribute gas to the southern Khorasan

Gevarzin-Bandar Abbass Boosting Pipeline

Explanation

Estimation

Consumption Volume (MCM per day)

5

Required credit estimation (million dollars)

(To construct the 70-km, 20-inch, 1050-PSI pipeline)

18

Gas Distribution to the rest of the cities and villages

Explanation

Estimation

Gas Consumption Volume (MCM per day)

Annually (When Fully operational)

5237

Required credit estimation (million dollars)

(For gas distribution to 2363 thousand households using pipelines and other methods)

4738

 

Shoorijeh underground gas storage

Explanation

Estimation

Daily Withdrawal(MCM)

20

Required credit estimation (million dollars)

(Including the 2nd phase of the project)

206

Damghan-Kiasar-Sari Gas Transmission Pipeline

Explanation

Estimation

Daily Capacity (MCM)

30

Required credit estimation (million dollars)

(To construct the 170-km, 42-inch, 1050-PSI pipeline along Damghan-Neka)

176

The 2nd Phase of the Ilam Gas Processing Plant

Explanation

Estimation

Production Capacity

4.3 MCM per day

Required credit estimation (million dollars)

147

Explanation

The power of the station is 50 Mega Watts with a (1+1)  unit arrangement. The station is supposed to increase the gas reception capacity from Turkmenistan and also distribute gas to the southern Khorasan

Processing Plant products

Methane: 789 MC

Ethane: 66 thousand tons

C+3 : 111 thousand tons

C+5: 126 thousand tons

Sulfur: 51 thousand tons

Ahvaz-Khorramshahr Gas Transmission Pipeline

Explanation

Estimation

Daily Capacity (MCM)

50

Required credit estimation (million dollars)

(To construct the 115-km, 48-inch, 1050-PSI pipeline along Ahvaz-Khorramshahr)

132

Mahshar Gas Boosting Pipeline

Explanation

Estimation

Daily Capacity (MCM)

27

Required credit estimation (million dollars)

(To construct the 68-km, 36-inch, 1050-PSI pipeline along DarrehAbbass-Mahshahr)

50

Shadegan Pipeline

Explanation

Estimation

Daily Capacity (MCM)

1.5

Required credit estimation (million dollars)

(To construct the 34-km, 12-inch pipeline)

7

Bidboland-Gachsaran Pipeline

Explanation

Estimation

Daily Capacity (MCM)

4

Required credit estimation (million dollars)

(To construct the 94-km, 20-inch pipeline)

31

Gas pressure booster stations of the 7th trans-Iranian Gas Pipeline

Explanation

Estimation

Daily Capacity (MCM)

70

Required credit estimation (million dollars)

(To construct three gas pressure booster stations with a 100 Mega Watt power)

322

Sarajah underground gas storage

Explanation

Estimation

Daily Withdrawal(MCM)

36

Required credit estimation (million dollars)

(Including the 2nd phase of the project and increasing the gas withdrawal and processing)

252

Yortsha underground gas storage

Explanation

Estimation

Daily Withdrawal(MCM)

4.8

Required credit estimation (million dollars)

(Including the 2nd phase of the project)

6

NasrAbad underground gas storage

Explanation

Estimation

Daily Withdrawal(MCM)

20

Required credit estimation (million dollars)

(Storage project and the 1st phase of the project)

467

Qezeltappeh underground gas storage

Explanation

Estimation

Daily Withdrawal(MCM)

20

Required credit estimation (million dollars)

(Qezeltappeh project)

990

The 9th Trans-Iranian Gas Transmission System

Explanation

Estimation

Daily Capacity (MCM)

110

Required credit estimation (million dollars)

(To construct the 1800-km, 56-inch pipeline along Assaluyeh-Bazargan border, 16 gas pressure booster stations with a 1725 Mega Watt power)

5137

Other investment areas in the gas industry related fields

1- Investment can be considered in the production of steel and polyethylene pipeline raw materials and the industries related to the manufacturing of the large size polyethylene valves, gas odorizers and also the seamless pipes in several sizes.

2- Investment in the sulfur related industries including constructing the industries and installations to utilize sulfur as the primary material for the production of commodities such as sulfur flower sulfuric- production of chemical fertilizers and industries such as pharmaceutical and plastic producing industries; some industries can be created beside the gas processing plants to use and produce such commodities.

3- Investment in industries utilizing the oil and gas liquids as the raw materials for the industry commodities such as the following:

  • Solvent material production industries such as thinner, etc.
  • Producing several kinds of oil products resulted from the oil and gas liquid processing including heavy hydrocarbon materials and its compounding with Fuel Oil and producing new commodities with different qualities
  • Industry related to the production of gas from light oil and gas liquids by building new processing plants near the oil and gas liquid producing refineries

4- Investment to create the industry for utilizing LPG and separation of Ethane, Propane and Methane and making and processing the petrochemical commodities like polypropylene which is used in plastic industries and disposable dishes

5- Instrumentation and control system equipment

6- Gas distribution, smart gas meter production, polyethylene valves and gas odorants

7- Need to have industrial units to produce gas sweetening and dehydration equipment, gas pressure booster station equipment, chemicals, catalysts, dehydrating materials, oils and pipe primers

8- The NIGC as the gas transmission authority has plans to implement thousands of kilometers pipelines including thick pipes having wide sheets as their primary materials and cover more than 70 percent of the pipe costs. Also, the required sheets for the under-pressure tanks in processing units and stations are supplied from foreign countries

The author is Member of IGU Gas Advocacy Task Force (TF2), Head of Communication Affairs with Science & Research Centers, Research & Technology Dept., National Iranian Gas Company
No.29-Southern Aban St. - Karimkhan Ave.-Tehran-1598753113-Iran
Tel:+98-21-81315646
Fax:+98-21-81315682
Email: omidvar@nigc.ir


Source: omidvar@nigc.ir
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