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National Iranian Oil Company (NIOC) intends to engage Iranian and/or foreign companies in the construction of skid-mounted processing facilities using the build-operate-own (BOO) method.
An agreement has been recently signed to that effect between the Academic Center for Education, Culture and Research (ACECR) and Petroleum Engineering and Development Company (PEDEC).
This skid-mounted facility which is to be used in the South Azadegan field may process 50,000 b/d of crude oil.
Overseen by Petroleum Minister Bijan Zangeneh, the agreement was signed by Touraj Dehqani, CEO of PEDEC, and Mohammad-Reza Pour-Abed, deputy head of ACECR.
The facility is expected to be designed and built within 15 months. The duration of operation for this project is set at three years, which may be renewed up to five years.
Addressing the signing ceremony, Zangeneh said future operation and desalination units should be skid-mounted in order to minimize costs and time. Demand is high for activity in this sector as most of the existing units are decrepit and ageing.
He said processing each barrel of crude oil was estimated to cost $1.2, which would be reduced through competitiveness.
Zangeneh said the petroleum industry can become the standard-bearer of Iran’s industrial development by envisaging projects and creating demand. He said Iran would continue to resist the abnormal conditions caused by sanctions.
What we are after, is the development and prosperity of Iran. Working for Iran to become the top power in the region is not a slogan, but a national demand and expectation, he added.
Accelerating Joint Field Development
Dehqani, CEO of PEDEC, spoke about the experience of using skid-mounted processing units in the development of fields, saying: Development of fields is capital-intensive. Such projects involve drilling and completion of wells at 60-70%, pipeline and gathering facilities at 20% and production and sweetening at 7-8%.
Experience shows that the bulk of development operations pertains to drilling and completion of wells. The pace and quality of implementation is good due to existing potential and facilities. A case in point is that following foreign companies’ exit from the South Azadegan project, 150 wells have been drilled and completed by Iranians, he said.
Dehqani added that whereas the production and sweetening units were time-intensive, it delayed the development of fields.
The technical complications of this sector is even likely to delay the implementation of a development project for one year. This issue takes up added significance in joint fields and high-risk reservoirs, he said.
He said skid-mounted processing facilities could be built quickly, adding: Such installations that can conduct full processing were first used in the South Azadegan field. Apart from contract issues, it did not last more than one year.
Dehqani said using the potential of the Jofair processing unit and the skid-mounted installations there, the oil production capacity of the Azadegan field enhanced.
He said thanks to Minister Zangeneh’s support as well as NIOC’s current and former CEOs support, knowhow to build skid-mounted facilities has been mastered.
The construction of a 50,000 b/d skid-mounted processing unit by ACERC can be a beginning for the implementation of this project and the acceleration of development, he said.
Experience Spreading to More Sectors
As mentioned earlier, NIOC first used the skid-mounted facilities experience in the South Azadegan field. It was happy with this experience due to the increased output recorded in the field which Iran shares with neighboring Iraq.
After that, Minister Zangeneh notified companies of the necessity of switching to skid-mounted production and desalination facilities.
Drilling wells, laying pipes and related processes account for major portion of field development costs. But non-operation of a refining unit whose share of development is meager may delay a project and cause capital stagnation.
As long as the processing unit of South Azadegan is not complete, such units would be of no help to development.
But the question is to know how the field development would be affected in case the processing unit is not completed.
Dehqani has said that such problem did not exist in South Azadegan because we won part of the production and desalination capacity of West Karoun, as well as the skid-mounted processing capacity.
He, however, said: Of course we would definitely need extra processing capacity to process oil, based on the target set for phase 1 of South Azadegan development (320,000 b/d).
