Iran signed 12 contracts for its largest-ever associated petroleum gas (APG) recovery project, aiming to capture about 295 million cubic feet per day (mcf/d) of flare gas from multiple oilfields in the country’s southern provinces.
The agreements, signed between the National Iranian South Oil Company (NISOC) and private sector investors during a video conference attended by President Masoud Pezeshkian and Oil Minister Mohsen Paknejad, cover 32 flare sites in the provinces of Khuzestan, Kohgiluyeh and Boyer-Ahmad, and Bushehr.
Addressing the ceremony, Pezeshkian said, "By capturing and utilizing flare gas, we have taken a major step not only toward significant economic gains but also toward improving environmental indicators and safeguarding the health of the people.”
Emphasizing the need to remove barriers facing the private sector, the president added, “Therefore, there must not be even a single day’s delay in advancing this effort."
Pezeshkian underlined that, “Not even a single day should be lost in preserving national assets. If possible—which I believe it is—these projects should be completed ahead of schedule. We must not allow flares to burn national assets daily before our eyes. Complementary plans for this goal must be quickly submitted to and approved by the government.”
Meanwhile, the oil minister said, “These 12 contracts will gradually increase flare gas recovery by about 295 mcf/d by the end of the Iranian calendar year (March 20, 2026).”
“With the continuation of this process and implementation of the planned projects, flare gas recovery will reach 44 million cubic meters per day by the end of the Seventh Development Plan (2029). This is exactly the quantitative target mandated in the plan,” Paknejad said.
He added that in the years leading up to the Pezeshkian administration, which took office in August 2024, Iran had created a total capacity of 330 mcf/d for flare gas collection.
Officials described the new contracts as a model of successful cooperation between the government, private investors, and foreign partners involved in technology transfer. The projects are expected to attract about $800 million in investment over two years and eliminate around 30 flare stacks, preventing the daily loss of 295 mcf of gas.
The initiative is projected to generate some $550 million in annual revenue, produce about 800,000 tons of gas condensates per year to feed petrochemical plants, and inject about 200 mcf/d of light gas into the national network — a move expected to bolster winter energy supplies.
National Iranian Oil Company (NIOC) CEO Hamid Bovard said the move marks “a new phase in the implementation of Iran’s comprehensive flare gas recovery plan.” “With this new set of contracts between NISOC and the private sector, the pace of flare elimination and associated gas recovery will accelerate,” he said.
Bovard said that under the Seventh Development Plan, the oil industry is pursuing three strategic goals: raising crude production to 4.5 million barrels per day, gas production to 1.3 billion cubic meters per day, and collecting associated gas across the country.
“To protect the environment, preserve hydrocarbon resources, and balance the national gas network, Iran is implementing its comprehensive flare gas collection plan,” he said. “Within the next two years, 1.9 billion cubic feet of flare gas — about 90 percent of recoverable volumes — will be captured.” He noted that the plan will prevent the emission of about 5,700 tons of carbon per day and includes the launch of Iran’s first mini- Natural Gas Liquids (NGLs) plant with foreign investment, as well as a modular refinery with a capacity of 45 mcf/d in the Masjed Soleyman oil region in Khuzestan Province.
Bovard also announced a new tender for 18 additional investment packages aimed at capturing gas from 42 more flare sites. “These packages will be offered at a base rate of zero to capable private investors as part of our drive toward full flare elimination,” he said.
“Flare gas recovery is not only a major step toward sustainable development and environmental protection, but also a clear example of safeguarding national wealth and achieving balance in the country’s energy equation,” the deputy oil minister added.
