Iran's Gas Sector Priorities Outlined

EghtesadOnline: Replacing eco-unfriendly fuels with natural gas, supplying petrochemical companies with gas as feedstock and exporting gas are among the Oil Ministry priorities in the current fiscal that started in March, the oil minister said.

News ID: ۷۴۷۱۶۵

28 April 2019

"Daily gas output at 850 million cubic meters has increased 30% compared to five years ago when total production was 620mcm/d," Bijan Namdar Zanganeh was quoted as saying by Shana on Saturday.

Referring the first priority, he said, "Close to 20 mcm of gas is used in the domestic transport sector per day. Safeguarding the ecosystem is a major issue for us and more industries should be provided gas to cut their mazut and diesel consumption."

“Such eco-friendly policies can help the National Iranian Oil Company export more liquefied fuel”, Financial Tribune quoted him as saying.

There still are cement plants in remote areas that are not connected to the national gas grid and burn an estimated eight million tons of mazut per annum, he recalled.

Supplying the petrochemical industry fuel as feedstock is also important because the key sector produces a variety of products, namely ammonia, methanol, butane, ethane, propane and acetic acid that are converted into more value-added goods like propylene.

Gas production from the giant South Pars Gas Field in the Persian Gulf was 280 million cubic meters in 2012. But that volume has surpassed 600 mcm -- up 117%, said Zanganeh.

He added that 94% of the population is connected to the national gas grid. “Laying pipes in mountainous and rugged terrains in provinces like Kermanshah is continuing, but at a slow pace.”

Iran is the world's third biggest gas producer after the US and Russia and gas accounts for 70% of Iran's energy basket.

Regarding gas exports Zanganeh said Turkey and Iraq are receiving 30 mcm and 60 mcm of gas on a daily basis respectively.

Asked about the Iran-Pakistan gas line project, the minister said, "They have violated the terms of the agreement. The National Iranian Gas Company is  committed to its side of the deal. Nonetheless, the US, Saudi Arabia and the UAE are putting pressure on Pakistan not to buy from NIGC."

The two countries are involved in extended talks over the construction of a gas pipeline that would stretch more than 2,700 kilometers from Asalouyeh in southwest Iran through the Pakistani provinces of Balochistan and Sindh.

According to reports, about 900 kilometers of the pipeline have been laid on the Iranian side of the border, but Pakistan has failed to fulfill its commitment to construct 700 kilometers of the pipeline on its own territory. The pipeline should carry over 20 mcm of Iran’s gas to Pakistan every day.

Zanganeh added that a deal to export gas to the Sultanate of Oman is being followed and a pipe-laying contract was to be finalized last year.

"There are only two companies that can carry out undersea operations at the depth of 1000 meters and they are not willing to undertake the project due to the economic restrictions imposed by the United States.”

Tehran and Muscat signed a preliminary $1.2 billion agreement in 2017 to export gas to the Arab county.  But the venture has not moved forward.

As per the agreement, Oman was supposed buy 28 mcm/d of gas from Iran for 15 years.