Iran to commission first gas storage project in May

12 April 2011

Gas storage projects lagging behind production schemes

Iran is preparing to commission its first underground gas storage facility in May to help it cope with the country’s fluctuating demand for gas.

Over the last six years, state-owned National Gas Storage Company (NGSC), a subsidiary of National Iranian Gas Company, has been working to build a reservoir capable of holding more than 1.5 billion cubic metres of gas at the Sarajeh reservoir near the central city of Qom.

Work is now 97 per cent complete and the reservoir will be commissioned in May, according to Morteza Ghashghai, managing director of Tehran-based Namvaran Simtech, which is managing the project on behalf of NGSC.

Iran gas production
YearProduction (Billion cubic metres)
199956.4
200060.2
200166
200275
200381.5
200484.9
2005103.5
2006108.6
2007111.9
2008116.3
2009131.2
Source: BP

A number of local engineering, procurement and construction (EPC) firms have been awarded contracts worth a total of some $700m. Tehran-based Oil Turbo Compressor Company was awarded the gas injection portion of the scheme. Gas will be initially injected into the reservoir at 4.5 million cubic metres a day (cm/d) and gradually increased to 9.5 million cm/d.

Gas injected in to the Sarajeh repository will at first come out with condensates when extracted, which must then be processed, although this will decrease with continued injection. Two local firms, Itok and Chegalesh are building the gas processing and refining facilities at the site.

A second storage scheme is being built at Yort-e-shah, close to Tehran, to hold about 600 million cubic metres of gas. Originally awarded to France’s Sofregaz and the local Pars Energy Gostar Drilling & Exploration, NGSC is now negotiating with new contractors to take over, says a source in Tehran.

In early March, NGSC invited local and international companies to bid for a further deal to explore the Nasrabad salt structure, southeast of Qom, to transform it into another gas storage reservoir. The deal includes geological studies, seismic surveys, drilling one exploration and appraisal well, coring and the preparation for full development within the next two years.

“Iran has the second-largest gas production in the world, but no gas injection projects for storage in times of need. The technology is not new, but this is probably the most exciting development in Iran’s oil and gas sector in years. There will be more projects like this to come,” says Ghashghai.

Iran has an estimated 29.6 trillion cubic metres of gas reserves and produced about 131.2 billion cubic metres of gas in 2009, according to UK oil major BP. The country plans to store between 10-15 per cent of its annual production (MEED 17:1:11).

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