Gas Supplies in Iran at Record Highs

EghtesadOnline: Natural gas supply has increased by 75 million cubic meters a day since Nov 2019, dispatching director of the National Iranian Gas Company said.

News ID: ۷۴۹۵۱۸

22 January 2020

“NIGC is now delivering 850 mcm of gas per day across the country, up 10% compared to October,” Mehdi Jamshidi Dana was quoted as saying by ISNA Tuesday.

Gas production capacity has reached 880 mcm/d, of which 630 mcm/d comes from South Pars Gas Field in the Persian Gulf and the rest (250 mcm/d) is produced by the Iranian Central Oil Fields Company that has three subsidiaries, namely West Oil and Gas Production Company, East Oil and Gas Production Company and South Zagros Oil and Gas Production Company, Financial Tribune quoted him as saying.

Compared to 2019, consumption in the household sector increased by 10% between Jan 10 and Jan 21 (2020) to reach 600 mcm/d.

A part of the unprecedented upsurge is due to the recent snowfall, cold spell and freezing weather in many regions. On Tuesday afternoon the weather in Tehran was 4°C and most regions in the northern regions reported below zero temperatures.

Moreover, the number of subscribers in rural areas has shot up as 3,000 towns have been linked to the national grid since March, 2019.

Normal gas consumption ranges between 450 to 500 mcm/d (when temperatures are between 3 to 8 degrees Celsius).

“For every 1 degree Celsius drop in temperature, gas consumption rises by 25 mcm/d.”

Regular Delivery

Jamshidi said NIGC has delivered close to 52 billion cubic meters of gas to 83 power stations nationwide in the past eight months.

“Gas delivery to power plants has never stopped, but is now limited.”

As per a contract between the Oil Ministry and Energy Ministry, NIGC is obliged to deliver power stations 300 mcm of gas per day between March and September, he said.

“The figure (300 mcm/d) is cut by half and reaches 150 mcm/d between October and February when most plants undergo the routine overhauls.”

Due to the extreme cold weather across the country in the last 10 days which pushed up consumption (600 mcm/d), NIGC had to curb fuel delivery to power plants by 50%.

Denying reports in the local press (in Golestan Province) about cuts in gas delivery to power stations, he said close to 75 million cubic meters of gas is delivered to the Energy Ministry every day.

As soon as temperatures rise, gas delivery to the powr palnts will double again.

Referring to the (low) efficiency of thermal power plants (24%) that use gas, he said conversion of all single-cycle power plants into combined cycles can help save 30 million cubic meters of natural gas per day.

An estimated 3 billion cubic meters of gas has been stored in Shourijeh and Sarajeh natural gas storage facilities in northeastern Khorasan Razavi Province since March 2019, which could rise to 5 billion if power plants had a higher efficiency, the senior official said.

Direct Relationship

In related news, Energy Minister Reza Ardakanian told ILNA that there is a direct relationship between household gas consumption and his ministry’s ability to export power.

“The more gas is used in homes, less fuel (gas) will be available for generating electricity,” he noted.

The Energy Ministry is committed to its overseas contracts and must export power to neighbors, namely Pakistan, Armenia and Afghanistan.

Shortage of gas as feedstock for the power plants puts pressure on the ministry because using mazut in the plants decreases efficiency and output.

“Not being able to export electricity will undermine our currency revenues and we cannot repay our debts to contractors and the National Development Fund of Iran (the sovereign wealth fund).”

Iran holds the world’s second largest gas reserves after Russia. According to BP Statistical Review of World Energy, Iran has 34 trillion cubic meters of natural gas or 18% of the world’s proven reserves.