The National Iranian Gas Company and Russia’s oil and gas giant Gazprom will soon finalize a natural gas swap deal in Moscow, as fruitful talks have been held between the two sides.
Iran’s Oil Minister Javad Owji made the statement after a meeting with Igor Levitin, an aide to Russian President Vladimir Putin, on Wednesday in Tehran, the Oil Ministry’s news service reported.
Negotiations to swap other petroleum products are yet to come to fruition, he added, noting that NIGC has the infrastructure for increasing gas import and swap with neighboring countries to 15 billion cubic meters per year.
According to the minister, the implementation of the swap deal with Russia will encourage other countries in the region to sign similar contracts and use Iran’s capacities in this regard.
“Having the largest high-pressure gas pipeline network after Russia, Iran can play a key role in transferring gas from eastern Iran to western parts and neighboring countries,” he added.
The deal with Gazprom will also be a big step for Iran, as it would ensure a stable gas supply to the country’s northeastern regions, which are far away from the sources of natural gas in the country.
Considering the large-scale access to equipment and pipelines in the country, the minister made it clear that the government is keen on commencing swap operations with northern neighbors.
According to Owji, Iran is willing to swap oil and gas from Caspian Sea littoral states, provided that Russia, Azerbaijan, Kazakhstan and Uzbekistan also take measures and cooperate with Iran in this regard.
“Ties between Iran and Russia have been growing in recent years in political, economic, trade and energy fields,” he added.
In January, Iran started transferring 5 mcm of Turkmenistan’s natural gas per day (2 bcm per year) to Azerbaijan, based on a trilateral agreement reached last November, and a new contract with Russia will raise Iran’s swap capacity.
Of the total volume of gas received from Turkmenistan, about 20% are Iran’s share as swap fee and the rest will be delivered to Azerbaijan.
Favorable Capacities
Stressing the significance of relations with Moscow, the Iranian minister said there were favorable capacities for broader cooperation between the two countries, especially in transportation, technical and engineering services and electrical engineering, as well as oil and gas fields.
Several rounds of talks have already taken place between Iran and Russia, focusing on the development of energy cooperation.
“Russia has already invested $2.5 billion in Iran’s power plant projects and new energy deals are expected to be signed between the two countries in two months,” he said.
Referring to an MoU signed in July by Mohsen Khojastehmehr, the head of the National Iranian Oil Company, and Vitaly Markelov, Gazprom’s deputy chairman of the Executive Board, Owji noted that the Russian oil and gas giant is committed to invest $40 billion in eight oil and gas fields over the next seven years.
Giving a breakdown, he noted that of the total investment, $10 billion will be allocated for the expansion of North Pars field, located 120 kilometers southeast of the southern Bushehr Province, and the development of Kish Gas Field, the second largest field in the Persian Gulf after South Pars located 30 km east of Lavan Island.
“The development of the two fields will raise NIOC’s natural gas production by at least 100 mcm per day,” he said.
North Pars is one of the biggest independent gas fields of the country.
A brief review of North Pars shows 17 wells have so far been drilled and 26 offshore platforms have been installed there.
Recovery Rate
North Pars has the capacity to produce 100 million cubic meters of gas per day. Such a recovery would require the drilling of 46 wells. The rate of recovery envisaged for North Pars stands at 61%.
Its gas will be used at processing plants for the annual production of 20 million tons of liquefied natural gas.
The Kish Gas Field's development plan includes three phases. In the first phase, 14 wells have been drilled but production has not begun.
A 200-km pipeline is planned to be laid to connect the field to refineries in South Pars Gas Field and Fajr Jam Gas Refinery in Bushehr.
According to Khojastehmehr, Gazprom will also invest $15 billion to increase pressure in gas wells in 24 phases of South Pars Gas Field.
The NIOC chief noted that Gazprom will invest an additional $5 billion on liquefied natural gas projects in Iran.
“Drawing on the experience of Russian oil and gas giants is crucial to transform Iran into a major player in the global gas market. Using the expertise of Russian gas giant Gazprom will enable NIOC to access advanced technology for extracting gas from deep geological repositories to produce and export liquefied natural gas,” he said.
