Iran Clean Energy Project

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Rudolf Huber
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BREADCRUMBS

Location: Iran (Middle East)
Type of project: Flare gas capture – LNG liquefaction – national/regional LNG distribution
Assumed initial capacity: from 40.000 to 500.000 metric tons of LNG per year
Estimated CAPEX: USD 40-500 MM (depending on configuration)
Estimated investment requirement for development: USD 5-30 MM
Estimated time from DTP to RFO: 40-48 months

 

SYNOPSIS

proj_map_icepICEP aims at developing and building as well as operate small and/or mid-scale LNG liquefaction trains with its purification and gas treatment plants, and distribution equipment as well as infrastructure. It will buy Natural Gas feedstock that currently flared from NIOC and resell LNG either to an Iranian counterparty or to regional customers.

ICEP aims to set up initial LNG production and distribution infrastructure in the Persian Gulf (PG) in order to provide Iran and potentially GCC countries with LNG as a clean and comparatively cheap primary energy solution for their electricity and utility markets. Electricity the entire region is strongly growing and hence provides a stable market.

After a successful startup, ICEP will also deliver LNG to the nascent LNG as a bunker fuel for sea-going vessels in the PG. Lastly, ICEP will help trigger a conversion to LNG as a fuel for heavy vehicles and high horse-powered machines in the region similar to what happens on the North American and the East Asian fuels market today.

ICEP will allow its customers to make the switch from costly and dirty residual fuels such as Heavy Fuel Oil (HFO), coal, other solid fuels and distillate fuels such as Diesel and Kerosene to the cleaner and cheaper LNG as a primary energy and fuelling source.

 

CUSTOMERS, MARKETS & BUSINESS MODEL

Mid-scale LNG production fits well with mid-scale LNG transport. This makes ICEP a regional player, not a global one. Initial customers of ICEP are utility type regional power producers as well as consumers with generation demands of 50 MW installed capacity or more. In Iran, the sole customer might be a government anointed company. Also, ICEP strives to be marine bound which makes scouting for production assets and also consumers close to the shore a priority.

Depending on the dimension of the initial project, ICEP will either aim for small-scale-Power-Producers or utilities as core customers. It will buy the feed gas at a negotiated price from NIOC and sell LNG on a delivered basis. Receiving infrastructure will have to be developed in lockstep with the project but will be owned and operated by the buyer of LNG.

TIMELINE, FINANCIAL REQUIREMENTS, AND MILESTONES

This is a pure project concept at its very beginning. Preparatory work has been conducted only to the level that there was a superficial market demand simulation done, initial contact has been made with the resource owner in Iran and basic interest has been recorded and a putative partnership with a technology partner in Iran has been initiated. A first high-level economic feasibility estimate has also been positive.

The project promoters have spent various trips in the target area scouting for information and building a net of contacts that would allow developing this project “fast track”.

That being said, this is Iran with its heavy dose of red tape, slack and some other structures that make work in this country a challenge.

DISCLAIMER

This project concept and all information therein is the sole property of The Methanist. By visiting this project concept you understand that even if you contact me, there is no obligation on my part to even respond you. If I respond this does not constitute any form of agreement to continue communication with you and/or to pursue this project with you. Please read the disclaimer for more information.

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Iran Clean Energy Project