Natural gas export via pipelines will soon become a thing of the past, which makes it crucial for the National Iranian Oil Company to prioritize the export of liquefied natural gas (LNG), an energy expert said.
“LNG trade is expected to surpass 500 billion cubic meters in 2023, because of strong demand in developing Asian markets. This is while Iran has not even entered the lucrative market yet,” Morteza Behrouzifar also told ILNA.
Iran’s Arab neighbor Qatar is selling more than 80 million tons of LNG per year while Iran, as one of the biggest holders of gas reserves, has not even started investing in the profitable business. Iranian energy officials still insist on expanding pipelines, he added.
The energy expert noted that in the past, laying thousands of kilometers of gas pipelines was the best way to sell the commodity but with the advent of modern technology, LNG markets are expanding rapidly and currently 50% of global natural gas market are dominated by LNG, which trend will grow steadily.
Iran currently supplies gas to its neighbors Iraq and Turkey via pipeline and to Armenia via road.
“If Iran targets farther destinations for gas export, it should be implemented by LNG vessels,” he said.
NIOC has no significant LNG output at present.
According to Behrouzifar, it will take four years for Iran to start mass production of the commodity.
Mohammad Hossein Adeli, the former secretary-general of Gas Exporting Countries Forum, also believes that Iran should focus on LNG exports, as shipment of liquefied gas is less risky compared to piped exports and is more cost-effective for long-distance consignments.
The completion of its largest LNG venture, known as Iran LNG, will transform the country into a major player in the global gas market.
Iran LNG Project
Reportedly, the Iran LNG project located at Tombak Port, approximately 50 kilometers north of Asalouyeh Port in Bushehr Province, has made 60% progress with an investment of $1.85 billion. Talks are underway to complete it in two years at a total cost of $3 billion.
The former GECF chief said by completing projects and devising plans to develop new initiatives for producing as much as 50 million tons of LNG per annum can help guarantee the country's share of natural gas exports in international markets.
Adeli believes that there is no consensus among Iranian officials over gas export.
"As long as Iranian officials do not adopt a unified policy on the issue, devising a long-term roadmap to attract investment to implement new plans will be next to impossible," he said.
Not long ago, three projects, namely Persian LNG, Iran LNG and Pars LNG in Bushehr Province, were underway but were put on hold due to funding problems.
“Had they been completed, the National Iranian Gas Company could be exporting as much as 20 million tons of LNG per year [equal to US annual LNG export],” he added.
Despite the ground realities, Iran’s gas officials are still hopeful of a gas deal with Pakistan and India, whereas investing in liquefied forms could have yielded more desirable results, especially in the long run.
There are currently 60 LNG terminals in Asia, with 40 others in the planning stage.
Adeli said the LNG industry paves the way for entering new markets, access to which is not feasible through pipelines.
The world's largest natural gas field, South Pars, is shared between Iran and Qatar, and estimated to hold roughly 40% of Iran's gas reserves. Qatar is currently the biggest LNG producer in the Middle East and ships 80 million tons of the fuel per annum.
