Natural gas supply to power plants has risen by 160% since March compared to January when it dropped under 100 million cubic meters per day, the head of the National Iranian Gas Company’s Dispatching Department said.
“Gas delivery to 123 thermal power stations has reached 260 mcm/d and it will rise by 16% in July,” Mohammad Reza Joulaei was also quoted as saying by IRNA.
NIGC is ready to supply as much as 300 mcm of gas as feedstock to power plants between July and September if they need, he added.
Almost 85% of Iran’s electricity (68,000 megawatts) is produced by power stations, most of which run on natural gas.
“NIGC produces upwards of 950 million cubic meters a day, which is mostly used to meet domestic demand,” he said.
According to the official, hydroelectric plants account for 12% of Iran’s power generation capacity if all the dams are full. Nonetheless, a remarkable decline in precipitation during the current water year (started Sept. 23, 2021) has reduced the capacity and there will be more pressure on thermal power facilities to meet rising demand.
Joulaei noted that even if power stations are supplied with adequate gas, power outages will be inevitable unless consumption stops at 70 gigawatts.
NIGC injected close to 262 billion cubic meters of gas into the Iran Gas Trunkline (IGAT) in the last fiscal year (ended March 20, 2022), up 6% or 16 bcm compared to a year ago.
“Of the total output, 244 bcm were consumed domestically and the rest was exported,” he added.
Giving a breakdown on domestic use, Joulaei pointed out that gas delivery to thermal power stations reached 66 bcm in the 12-month period, up 8% compared to the previous year.
“Gas consumption in industries, namely petrochemical and cement, reached 46 bcm, indicating a growth of 7% compared to 41 bcm in 2019,” he said.
Foreign Currency Revenue
Supplying gas to power plants, instead of liquefied fuels such as diesel and mazut, has not only curbed air pollution but also increased foreign currency revenue.
According to Joulaei, air pollution has posed a challenge in the cold season for more than a decade, as consumption of diesel and mazut increases in power plants. However, the government has started substituting liquefied fuels with natural gas in the power plants.
Iran has abundant natural gas deposits and it is more cost-effective to use gas for power generation instead of liquid fuels.
NIGC has managed to substantially raise gas production, especially from the giant South Pars Gas Field in the Persian Gulf to meet the growing needs of power plants. However, households’ demand was so high last winter that gas delivery to power plants was cut by half falling to 100 mcm/d.
Global Consumption
While average global gas consumption has risen 2% in the past three decades in Iran, demand has hiked by a massive 4% during the same period.
"Such consumption patterns must change, or else there will another energy crisis,” experts have regularly warned.
"The current production of 950 mcm per day will increase by 15% to 1.1 bcm/d by July.”
The additional production will come from phases 13 and 14 of South Pars Gas Field, which are not yet fully operational. 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.
On the role of local manufacturers in promoting the key gas sector, Managing Director of Iran Gas Engineering and Development Company Hassan Montazer-Torbati said, “The gas industry is focused on domestic capabilities and most items for the distribution sector are made by local firms.”
In recent years, NIGC has linked more than 15,000 villages. Every year, almost 1,000 kilometers of gas transmission lines are laid across the country, thanks to the efforts of local engineers, he added.
Iran has one of the largest gas networks in the world. Close to 40,000 km of high-pressure gas pipelines have been laid in four decades and there are plans to add 5,000 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.
Households and the commercial sector accounted for a major share of consumption at 121 bcm during the year or 8% more than a year ago.
“Approximately 11 bcm were either stored in Sarajeh and Shourijeh storage facilities in Qom and Khorasan Razavi provinces or injected into oil wells,” he added.
Montazer-Torbati said 18 bcm were sold to Iraq and Turkey in 2020, while neighboring Armenia and Azerbaijan also buy gas from Iran via swap deals.
