Gas to Overtake Oil

EghtesadOnline: Natural gas will account for a major part of energy basket in Iran and the world, as it is the most prevailing source of energy.

News ID: ۷۸۳۳۳۵

18 July 2018

Mohammad Ali Khatibi, Iran’s former representative to the Organization of Petroleum Exporting Countries, made the statement on the sidelines of a press conference for the First International Iran Gas Show (IRGS 2018) in Tehran, the website of IRGS reported.

“Among major fossil fuels, natural gas—which richly abounds on the Earth—has clear advantages in terms of lower pollution and production costs,” he said, adding that most guesstimates regarding the future energy mix signify a hike in the consumption of natural gas and countries with big reserves will have the opportunity to play a bigger role in the international market.

IRGS 2018 will be held in Tehran on Sept. 1-4 at Shahr-e Aftab International Exhibition Complex, with about 200 local and foreign firms in attendance, Financial Tribune reported.

According to the official, the country’s crude reserves are smaller than those of natural gas and will exhaust sooner or later, that is why new approaches should be adopted to take a better advantage of gas domestically and internationally.

Natural gas accounts for 70% of the country’s energy basket. Iran holds 34 trillion cubic meters of natural gas reserves, the largest in the world ahead of Russia with 32.6 trillion cubic meters, according to BP estimates.

Khatibi noted that not only can the fuel oil the wheels of domestic industries, such as petrochemical and power plant units, but it also has the potential to generate revenues.

“The country’s energy basket is opting for eco-friendly natural gas,” he said, adding that gas is used by petrochemical plants as feedstock, for example, in gas to liquids (GTL) technology.

Furthermore, it is converted to value-added products like gasoline, diesel and jet fuel.

On the supremacy of oil sector over gas industry, Khatibi said the emergence of oil industry in Iran dates back to a century ago, while its gas sector is a fledgling.

Gas was not as popular as oil until recently and a plethora of countries even preferred coal over gas, as gas extraction, storage and transfer needed advanced know-how.

“But the fuel is experiencing a paradigm shift. The world has overcome technical challenges and governments are aware of the value of gas,” he said, noting that natural gas is not only more economical but also less polluting than oil.

Moreover, growing concerns over global warming have caused officials to appreciate the value of gas.

“Notwithstanding Iran’s massive gas reserves, it not a major gas exporter, but housing exhibitions like IRGS can and will introduce existing and potential capabilities to potential investors and customers,” he said.

“Such events need to be highlighted, as they can help us enter foreign markets and attract new clients.”

The expert believes that knowing the competence of rivals in the market can help domestic gas sector players recognize weaknesses.

“Iran’s gas industry could be a key source of income, as gas deals are long-term and cannot be affected by sanctions,” he said.

According to Nasrollah Seifi, the former managing director of Iran Fuel Conservation Company, Iran possesses about 18% of the world’s gas reserves and its production accounts for over 5% of the global figure.

Nonetheless, its share in the global gas trade is a meager 1%, which is mainly due to the absence of new marketing strategies.

“Iran’s proven gas reserves are worth €7 trillion,” he said, adding that the industry can play a key role in revitalizing its domestic economy.