The completion of Iran’s largest liquefied natural gas venture, known as "Iran LNG", will help the National Iranian Oil Company earn $5 billion in revenues via exports, the head of the Iran Liquefied Natural Gas Company said.
“Close to $2 billion have so far been invested in the initiative that has made 40% progress,” Hadi Amir-Qashqaei was also quoted as saying by the Oil Ministry’s news service.
“The facility will have the capacity to produce 5 million tons of LNG annually,” he added, noting that Qatar is planning to increase its annual capacity to 120 million tons.
As per the deal signed between Iran LNG Company and NIOC last week, the former was tasked with collecting associated petroleum gas from West Karoun oilfields and converting them to LNG and storing it in cylinders.
“The Iran LNG project, at Tombak Port, located 50 kilometers north of Asaluyeh Port in Bushehr Province, has made 40% progress and procrastination in developing the plan will deprive the sector of opportunities,” he said.
LNG is a clear, colorless and non-toxic liquid that forms when natural gas is cooled to -162 degrees centigrade. The cooling process shrinks the volume of the gas 600 times, making it easier and safer to store and ship. In its liquid state, LNG will not ignite.
When LNG reaches its destination, it is converted into gas at regasification plants. It is then piped to homes, businesses and industries where it is burnt for heating purposes or generating electricity.
LNG is now also emerging as a cost-competitive and cleaner transport fuel, especially for shipping and heavy-duty road transport.
Energy Mix
LNG is rapidly playing a bigger role in the energy mix, as it increased from 100 million tons in 2000 to nearly 300 million tons in 2017.
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 NIOC to prioritize LNG export.
“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 selling more than 80 million tons of LNG per year while Iran, as one of the holders of biggest 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 market are dominated by LNG, which trend will grow steadily.
Iran currently supplies gas to its neighbors Iraq and Turkey via pipeline and to Armenia via road.
“If Iran targets farther destinations for gas export, it should use LNG vessels,” he said.
NIOC has no significant LNG output at present.
