NIGC Reports Increase in Gas Production, Exports

NIGC Reports Increase in Gas Production, ExportsNIGC Reports Increase in Gas Production, Exports

Gas export volume has increased eight percent during the current Iranian calendar year (ends March 21) compared with the same period last year, the National Iranian Gas Company's planning manager told ILNA.

Owing to an increase in gas production from the South Pars gas field, gas export volume has exceeded imports by 2.5 billion cubic meters (bcm), indicating a positive gas trade balance, Hassan Montazer Sharbati said Wednesday.

Gas production capacity is expected to increase by 22 bcm before yearend compared with the same period last year, the official said, noting that the upper limit of increase in gas production over the past years stood at 5 to 10 bcm. "This year, gas production growth has hit a record high since 1970."  

Gas supply to power plants have had a 40 percent increase in the current year, saving the country $10-12 billion in hard currency.

The domestic gas production capacity increased by 100 million cubic meters per day (mcm/d) in the current Iranian year, and there are plans for a further 100 mcm/d increase next year, to reach the production target of 200 mcm/d by the end of next year (March 2016).

The NIGC had difficulty supplying gas to household and commercial sectors over the past years due to shortfalls in gas production, and hence the oil ministry listed development of South Pars gas field as having the utmost priority.

After Persian Gulf states such as Oman, Kuwait, UAE, Saudi Arabia, Bahrain, and Iraq, Europe is Iran's second priority for gas exports, he noted. Iran will also export 3-4 mcm/d of natural gas to Iraq by summer.

Currently, Iran exports gas via pipelines to three neighboring countries – Turkey, Armenia, and Azerbaijan. Iran supplies less than one percent of global natural gas exports, according to the US Energy Information Administration (EIA).

Turkey receives more than 90 percent of Iran’s gas exports under a long-term contract. Armenia and Azerbaijan have swap arrangements with Iran, and import 6 percent and 3 percent of Iran’s natural gas exports, respectively.

Armenia exports electricity to Iran to compensate for the natural gas it receives. Azerbaijan repays Iran for the natural gas sent to its Nakhichevan exclave by exporting similar volumes to northeastern Iran.

Iran holds the world’s second biggest natural gas reserves after Russia, which accounts for 17 percent of the world's proved natural gas reserves. Iran's largest natural gas field, South Pars, is estimated to hold roughly 40% of Iran's gas reserves.

>>Project Basra

Iran is considering supplying natural gas to the Iraqi city of Basra, Torbati announced.

“We have already signed a contract for gas exports to the Iraqi capital Baghdad, and we also plan to put Basra on our overseas gas supply list,” he said.

He said that the required infrastructure for gas delivery to the southern Iraqi port city would be built one year after an agreement is signed between the two sides.

“Pipe-laying operations for this project has already reached as far as Khorramshahr, in Khuzestan Province, and it would be possible to extend a branch from Iran Gas Trunkline 6 (IGAT6) for gas exports to Basra,” according to Torbati.

He said that Iran would initially supply gas to Basra at 10 mcm/d, adding that the volume could increase "if there's increase in demand from the Iraqi side."

>>SP Output to Rise

Qatar's extraction from South Pars gas field is 1.6 times higher than that of Iran, according to Ali Akbar Shaabanpour, managing director of Pars Oil and Gas Company.  

Currently Qatar and Iran are producing approximately 22 and 15 billion cubic feet (623 and 424.7 mcm) of gas from South Pars field, respectively. With a projected increase in gas production to 17 billion cubic feet (481.3 mcm) next year, production disparity would be reduced to 5 billion cubic feet (141.5 mcm).

More than $7.3 billion has been invested in South Pars Phase 12. Revenues from Phase 12 stood at $1.6 billion over the past year. Even though Phase 12 has not reached full production yet, it is currently generating $17 million in revenues per day and $6 billion per annum, assuming 13 cents per cubic meter and $60 per barrel of gas condensate produced in the phase.

Phase 12 is South Pars’ biggest phase in terms of volume of activities as well as investment and production level. The field is estimated to contain 14 trillion cubic meters of gas and 18 billion barrels of gas condensate. The phase, which is scheduled to come online next week, will see some 75 mcm/d of sweet gas pumped into the national gas network.

South Pars is the world's largest gas field, shared between Iran and Qatar, covering an area of 3,700 square kilometers of Iran's territorial waters in the Persian Gulf. It adjoins Qatar’s North Field, which measures 6,000 square kilometers.