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Investors circle Iranian gas opportunities

Iran has huge opportunities in the gas sector, but needs to build confidence both in its upstream investment environment and its reliability as a long-term gas supply partner. Neil Ford


Iran has huge opportunities in the gas sector, but needs to build confidence both in its upstream investment environment and its reliability as a long-term gas supply partner. Neil Ford
It is also the world's third largest producer of gas, yet it has never been able to exploit this on a large scale for export as a means of completing its oil projects.
Gas production is to rise to 460 Bcm/yr gross by 2021, partly to increase supplies for domestic power generation and fertilizer production, but also to enable a big increase in exports.
Under sanctions, it tried to develop the oil and gas industry with little outside assistance, but oil production fell, ambitious gas pipeline projects remained on the drawing board and no LNG trains were constructed but the investor-friendly approach will slowly intensify.
Export Potential
Iran has fairly well developed domestic pipeline grid and almost all gas is used domestically, with the lions share going to the power sector. This existing grid could be used to boost the country's exports to its near neighbors. Progress has already been made on a proposal to export gas to Oman. A bilateral deal on the project was signed in 2013 and included a 15- year export contract.
According to reports in Tehran, the National Iranian Gas Export Company (NIGEC) has held talks with the Omani government, shell, korea Gas Corporation and Total on the development of a gas pipeline between the two countries
In addition, development of the Iran – Iraq gas pipeline is approaching completion. Under a deal signed in 2015, Iran will supply Iraq with up to 65 MMcm/d of natural gas via a line to Mansourieh power plant. Export will start at 7 MMcm/d.
It is in the case of moving Iranian gas to Europe. LNG would also allow Iran access to multiple markets and avoid the security risks of crossing into Turkey.
The one argument in favor of an Iran-Europe line is that it could aid political and security. The construction of a high capacity pipeline would generate substantial income for Iranian government and would encourage Tehran to cultivate better relations with European states.
LNG Development
Prior to the ramping up of sanctions a decade ago, Iran had intended to develop three separate LNG schemes. Work on Iran LNG had begun before the imposition of sanctions and is still going on. The government is in talks with unnamed foreign Companies on completing the venture and hopes to begin exporting LNG by 2020.
 
 
Source: Platts – Energy economist-Dec 2016

Source: platts

 
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