Iran Keen on $2.5b Gas Project With Russia

EghtesadOnline: The national gas company is interested in a joint venture with Russia to develop the 9th Iran Gas Trunkline (IGAT-9), managing director of National Iranian Gas Company (NIGC) said on Monday.

News ID: ۷۳۹۴۰۰

24 January 2017

“The pipe-laying project, worth $2.5 billion, can be implemented in the form of engineering, procurement, construction and financing (EPCF) contract if the licenses are obtained from the government," Hamidreza Araqi, who also is a deputy oil minister, was quoted as saying by Mehr News Agency.

IGAT-9 is a 1,900-kilometer prospective pipeline which will stretch from the southern city of Asalouyeh in Bushehr Province through Ahvaz, Dehgolan and eventually the Bazargan district and border crossing point in West Azerbaijan Province in the northwest.

The pipeline is envisaged to carry 110 million cubic meters of gas per day from South Pars Gas Field using 17 compressor stations, according to Financial Tribune.

According to Araqi, Russia and Iran, two countries with the largest natural gas reserves, can expand cooperation in wide-ranging areas including gas trade, R&D and implementation of joint projects.

Russia with 48 trillion cubic meters and Iran 33 trillion cubic meters together hold more than 40% of the world's global gas reserves, according to BP statistics.

"Iran's gas output is higher than its domestic demand," Araqi said without providing figures. He said the country can boost exports by improving energy efficiency, using the expertise of Russian gas giants such as Gazprom.

Iran ramped up gas production in recent years following the launch of several projects in South Pars, the giant gas field it shares with Qatar in the Persian Gulf.

Araqi said Iran's total gas production is around 700 mcm/d and production will surpass 1 billion cubic meters by mid-2017 as more South Pars phases come on stream.

--- Russian Role

After holding talks with Araqi in Tehran last month, Alexander Medvedev, deputy chief executive of Gazprom said his company is ready to play a role in Iran's gas supply chain.

"We are keen to take part in exploration and production projects, LNG (liquefied natural gas) production and gas exports" including a plan to supply Iran's gas to India, he said.

"We are ready to partake in major gas projects, even if they're complicated. But collaboration should meet the interests of both sides."

Medvedev also said Gazprom is willing to operate in Iran's energy market alongside European majors.

---- MoU With KOGAS

NIOC and Korea Gas Corporation (KOGAS) have signed a memorandum of understanding to pave the way for the state-owned Korean company to implement mega projects in Iran's petroleum industry.

The agreement, signed in May 2016, reportedly calls for conducting feasibility studies for the construction of Iran Gas Trunklines (IGAT 9 and 11) as well as laying a subsea pipeline through the Persian Gulf to supply gas to Oman on the Arabian Peninsula.

Pointing to KOGAS experience in gas projects, Araqi added that the agreement calls for conducting research and development for mini liquefied natural gas projects as well as LNG and compressed natural gas projects.

According to the CEO of KOGAS, Lee Seung-hoon, Seoul and Tehran will cooperate in the development of gas projects via technology transfer and joint ventures.

"KOGAS has covered all of South Korea with a single gas pipeline," according to Lee, who says that his company has successfully implemented gas trunkline projects, which are designed for natural gas supply from the production site to consumption points, not only in South Korea but also in Mexico, Indonesia, Mozambique and Peru.