As long as Iran does not establish good relations with the international community, increasing natural gas export capacity will remain a dream, a former deputy oil minister for international and commercial affairs said.
“Developing export infrastructure, whether through pipelines or in the form of liquefied natural gas, requires massive investment and encouraging investment needs constructive interaction with the world,” Ali Majedi was also quoted as saying by ILNA.
The only way Iran can attract foreign investment is by fostering cordial relations with the international community, he added.
The ex-official said it is impossible to be at war with half the world and at the same time urge international oil and gas giants to invest in domestic initiatives.
“So, the nuclear deal’s critics should explain how they expect the country to bring in foreign investment without having good ties with other nations," he said, referring to the historic nuclear agreement signed between Tehran and the six major world powers in 2015 when some of the international sanctions, imposed over Tehran’s nuclear activities, were lifted.
"For us to raise the current gas export capacity of 50 million cubic meters per day, we need to draw investment from the private sector as well as foreign investors," he added.
According to the official, the best way to stimulate the underperforming economy is by promoting investment which, in turn, requires engagement with the world.
Referring to Iran’s massive gas reserves (34 trillion cubic meters), Majedi said Iran has never been a major player in the international gas market due to its controversial political decisions that have made foreign firms lose interest in funding domestic projects.
On the other hand, all those multinational firms have been developing oil and gas fields in Iran’s tiny Arab neighbor Qatar because of which it operates 14 LNG trains with a total annual production capacity of over 80 million tons.
“Iran is still deprived of the technology to produce LNG,” he said.
Efficient Foreign Policy
Without an efficient foreign policy, it would be impossible to develop the economy as foreign investment is indispensable to economic growth.
financial system and cooperation with international bodies, Majedi said.
“No country is known to have successfully developed its economy by adopting an adventurist foreign policy. Countries such as China and India did not begin making economic progress until they put the foreign policy at the service of economic development,” he added.
According to Morteza Behrouzifar, an energy expert, 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 LNG.
“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,” he said.
Iran’s Arab neighbor Qatar is producing 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 markets are dominated by LNG, which trend will grow steadily.
Iran currently supplies gas to its neighbors Iraq and Turkey via pipeline and to Armenia by road.
According to Behrouzifar, it will take at least four years for Iran to start mass production of the commodity.
The completion of Iran’s largest LNG venture, known as Iran LNG, will transform the country into a major player in the global gas market.
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.
Behrouzifar 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.
