Gas Output Capacity to Reach 1.1 Billion cm/d in 4 Months

EghtesadOnline: Natural gas output capacity is expected to increase by 100 million cubic meters per day over the next four months, managing director of the National Iranian Gas Company said on Tuesday.

News ID: ۷۸۶۱۶۳

03 March 2021

"The current production of 1 billion cubic meters per day will increase by 10% to 1.1 bcm/d in July,” IRNA also quoted Hassan Montazer-Torbati as saying.

The rise in production will come from phases 13 and 14 of South Pars Gas Field in the Persian Gulf, which are not fully operational yet. The sixth, ninth, 10th and 11th Iran Gas Trunkline (IGAT-6, IGAT-9, IGAT-10, IGAT-11) are being extended.

IGAT is a series of nine large diameter pipelines built to supply gas from refineries in the south (Khuzestan and Bushehr provinces) across the country.

Of the total output (1 bcm/d), close to 75 mcm/d are sold to neighboring states, namely Iraq and Turkey, Montazer-Torbati said.

Armenia and Azerbaijan also buy gas via swap deals.

“Gas export has registered a 100% rise over the last seven years,” he added, noting that NIGC’s annual sales stood at 9 bcm in 2013. Nonetheless, the figure amounted to 18 bcm in 2020.

Despite the fact that NIGC’s export network has been extended to face delivery challenges, export capacity is unlikely to boost further unless domestic consumption is curtailed.

According to the official, consumption in household and commercial sectors accounts for 70% of the total output (1 bcm/d) and close to 230 mcm/d of gas are delivered to power plants and petrochemical plants.

The NIGC chief noted that as long as gas is used in petrochemical complexes as feedstock and converted to an added-value commodity, there is no major concern about not being able to sell gas in international markets. However, keeping gas export at the present level is necessary to foster foreign relations.

Ongoing Talks With Turkey

Referring to ongoing talks between NIGC and Botas, Turkey's state oil and gas company, Montazer-Torbati noted that Ankara has become a more adept gas consumer and negotiator, so striking a long-term deal will not be as easy as the one signed in 2001 because Turkey has other reliable suppliers, such as Azerbaijan, Nigeria, Qatar and Russia.

As per a 25-year deal, NIGC started selling gas to Turkey in 2001 and the contract will expire in 2026.

Economic experts have said energy diplomacy and an open-door foreign policy should be at the forefront of Tehran’s gas export scheme.

Struggling with financial crises and not having access to cutting-edge technology, Iran needs to take a balanced approach toward its gas strategy that includes geopolitical considerations and market realities.

“Friendly political relations with neighbors, reducing the bloated bureaucracy, putting in place a functioning regulatory body and a responsive legal framework can help Iran promote its exports, like natural gas,” Montazer-Torbati said.

Local Manufacturers

On the role of local manufacturers in the gas industry, the official said, “The gas industry is focused on domestic capabilities and most items used in the distribution sector are manufactured by local firms.”

In recent years, NIGC has linked more than 15,000 villages to the gas grid and the equipment used in the network were produced by Iranian companies.

Every year, about 1,000 kilometers of gas transmission lines are laid across the country and with the efforts of local engineers, gas pipeline sheets have been indigenized, the official said.

Iran has one of the largest gas networks in the world. Close to 40,000 km of high-pressure gas pipelines have been laid across the country and there are plans to extend it to 45,000 km by 2026.

In terms of gas infrastructure, Iran tops the list in Asia and is third in the world after Russia and the US.

“In other parts of the industry such as gas refineries, a major part of the equipment are manufactured domestically and we predict that by 2022 all the chemicals and items used in refineries will be manufactured by local companies,” Montazer-Torbati said.

More than 3,000 villages have been connected to the gas grid since the beginning of the current fiscal year (March 2020).

According to NIGC data, over 1,100 cities, 24,000 towns and 27,000 villages are linked to the rapidly expanding gas grid.

“By the end of the year, gas supply to 3,000 villages will be complete and 90% of rural regions will be connected to the grid,” Montazer-Torbati said.

The move is in line with the government's goal of linking all urban areas and 95% of suburban population to the national gas network by 2022.