Iran and France have reached a final agreement on setting up Iran’s first floating production of LNG from Forouzan oilfield in the Persian Gulf, National Iranian Oil Company (NIOC) announced.
“Final negotiations have been held between two Iranian companies and a reputable French company in order to set up an FLNG unit,” Deputy Petroleum Minister and Managing Director of NIOC, Roknoddin Javadi, said.
The names of the companies involved in the agreement were not disclosed.
Javadi added that the three companies will form a consortium to build the Middle East’s first FLNG plant with a capacity to produce 1 million tonnes of liquefied natural gas a year.
The plant’s feedstock will come from the gas currently being burnt at the Forouzan oilfield which Iran shares with Saudi Arabia.
Iranian and French investors will finance the acquisition of the necessary LNG tankers and an FLNG vessel, while NIOC will manage marketing and sales.
Up to USD 1 billion is expected to be invested in Iran’s FLNG project to convert 200 million cubic feet of gas to liquefied natural gas a day, head of investment at NIOC, Ali Kardor said last month, adding that the project is expected to take two years to come online, with the French developer to be allowed to use the produced gas for a further three years.
The project would mark Iran’s first-ever processing of natural gas associated with oil production instead of burning it off. According to the figures provided by the Ministry of Petroleum, about 5.4 million cubic meters (189 million cubic feet) of gas is burnt off per day at the Forouzan platform.
Iran planned to pipe the gas from the Forouzan field to an LNG facility on Kharg Island before intensified sanctions prevented the scheme from taking off.