Iranian Energy Economics

The Impact of Carbon Dioxide Price on the Economic Feasibility of Associated Gas Processing Units: A Case Study of NGL3200

Articles in Press

Document Type : Research Paper

Authors

morteza tahamipour zarandi 1
Mohammad Amin Najafi 2
Fazel Moridi Farimani 3

1 Assistant Professor, Faculty of Economics and Political Science, Shahid Beheshti University, Tehran, Iran.

2 Shahid Beheshti University

3 faculty member of Shahid Beheshti University

https://doi.org/10.22054/jiee.2025.83939.2129
Abstract
In Iran, an average of about 40 million cubic meters of oil-associated gas is flared daily, and the country will rank second in the world in this field in 2023. Since 2014, one of the goals of the National Oil Company has been to collect oil-associated gases by transferring NGL units to the private sector. The aim of this research is to evaluate the financial and economic aspects of the Hoveyzeh Persian Gulf Oil-Associated Gas Refining Project by modifying the oil-associated gas pricing formula, considering the social discount rate, and selling carbon emission certificates. For this purpose, the cost-benefit analysis method has been used in this research. To modify the oil-associated gas pricing formula, first the amount of carbon dioxide emissions in the event of not collecting oil-associated gas was calculated and then it was valued based on the market price of Iranian carbon dioxide. Then, the value of unreleased carbon dioxide was factored into the oil-associated gas pricing formula. The results show that gas processing with oil is not justifiable from the private sector perspective and the net present value of the project is -598.59 million dollars. However, by modifying the pricing formula and issuing carbon certificates, the internal rate of return (IRR) increases by 11.58% and the net present value of the project reaches 1908.63 million dollars, which indicates the economic justification of the project from the perspective of society.

Keywords

Associated petroleum gases
NGL units
financial and economic evaluation
carbon dioxide price
environment
Subjects
Iranian Energy Economics

Articles in Press, Accepted Manuscript
Available Online from 27 October 2025

  • Receive Date 25 January 2025
  • Revise Date 27 July 2025
  • Accept Date 27 October 2025
  • First Publish Date 27 October 2025
  • Publish Date 27 October 2025

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