Natural gas consumption has experienced a 51% growth in the last eight years, the head of National Iranian Gas Company, a subsidiary of the National Iranian Oil Company, said.
“Gas consumption reached 233 billion cubic meters in the last fiscal year [ended March 20, 2021], while the figure was barely 154 bcm in 2013,” Hassan Montazer Torbati, was also quoted as saying by IRNA.
Iran is burning off record amounts of natural gas, which is way higher than the global average, he added.
With a population of 82 million, Iran burns more than 200 bcm of gas annually, which is closer to that of China, the second-largest economy and the most populous country in the world, which consumed a total of 191 billion cubic meters in 2015, data show.
“Our population accounts for 1.1% of the world’s population, although 6.7% of the global gas are used in Iran. While the average global gas consumption has observed a mild rise of 1.65% in the past three decades, Iran's demand for the fuel has hiked by about 4.2% during the same period, which is alarming. Such injudicious consumption pattern should be reconsidered by adopting efficient strategies," he added.
According to a report published by BP Statistical Review of World Energy in 2019, Iran’s natural gas consumption in 2017 stood at 214.4 billion cubic meters, up from 201.3 bcm one year ago, which mark an upward shift of 6.50%.
Reportedly, almost 40% of Middle East gas consumption take place in Iran, an unreasonably high level by any standard.
The NIGC chief noted that the lion's share of gas consumption pertains to households, while power plants are in second place.
Unless the issue is taken into consideration, the official said, the national gas grid will face major challenges in meeting the gas demand.
He called for long-term strategies to prevent such a high consumption rate.
The abundance of natural gas, coupled with cheap tariffs and subsidies, has led to the profligate use of fossil fuel in Iran. Analysts and experts have long argued that unless the government scales back heavy energy subsidies, the wasteful consumption pattern will endure.
The latest government data put gas output at around 1 bcm per day.
Iran holds the world’s second largest gas reserves after Russia and the clean fossil fuel is its single biggest source of energy.
NIGC exported around 20 bcm of gas to Iraq and Turkey.
“Close to $30 billion have been invested in developing gas infrastructure in Iran since 2014,” Torbati said.
Indigenized Equipment
The NIGC chief said a big portion of the funds went to develop South Pars Gas Field in the Persian Gulf and the Iran Gas Trunkline to expedite gas delivery to remote rural areas, power plants and industries.
Domestic engineers have indigenized 25 critical parts and equipment in the sector, including turbines, compressors and pipes.
Almost 95% of the urban and rural population are now linked to the gas grid and gas supply projects to 4,000 villages are expected to come on stream next March, he added.
Currently, some 36,000 villages comprising 85% of the rural areas have access to natural gas, to which another 6,000 will be added within a year. Expansion of the national gas grid has been made possible due to the rise in gas production.
Data indicate 18,000 villages were connected to the national gas network since 2013.
There are an estimated 10,000 rural districts (mostly in the underdeveloped Sistan-Baluchestan Province) that still lack piped gas.
According to Oil Minister Bijan Namdar Zanganeh, NIOC paid $35 billion in natural gas subsidies in 2020, up 35% compared to 2018.
“Iran’s subsidies for natural gas consumption increased from $26 billion in 2018 to $35 billion in 2020,” he said.
“Iran spent $48.66 billion on fossil fuel consumption in 2017, of which $17.89 billion were allocated to natural gas.”
According to the minister, Iran is experiencing the most significant increase in subsidies to fossil fuel-based electricity, alongside Venezuela, Mexico, Egypt and China.
Energy experts believe natural gas consumption is above the global average due to the massive subsidy. An estimated 1 bcm of gas are injected into the Iran Gas Trunkline per day in winter, of which 700 mcm come from the giant South Pars Gas Field.
