Gas Export to EU Through FLNG Shipments

Gas Export to EU Through FLNG ShipmentsGas Export to EU Through FLNG Shipments

While the general discussion focuses on the prospects of Iran starting natural gas exports to Europe via pipeline or liquefied natural gas shipment by 2020, a senior Iranian gas official says the country is in talks for the use of floating LNG vessel serving to liquefy and transit Iranian gas to Europe sooner.

In its Fourth Five-Year National Development Plan (2005-9), Iran set targets to produce 70 million tons of LNG from the South Pars, North Pars, Ferdowsi and Golshan gas fields by launching six LNG production facilities, but all of them were cancelled due to sanctions against the country.

Oil Minister Bijan Namdar Zanganeh recently discussed resuming a 10-million-ton LNG production project with Germany’s Linde AG during his visit to Berlin, Natural Gas Europe reported.

Iran also has negotiated building mini LNG plants with the Russian Gazprom.

However, Alireza Kameli, managing director of National Iranian Gas Exports Company, told Shana on July 4 that Iran has been negotiating with the “world’s biggest company in FLNG shipping to transfer Iranian gas to Europe in seven to 12 months.”

Floating LNG can take coastal natural gas, liquefy, store or transfer to markets overseas.

Kameli also said NIGEC is seeking LNG projects in the country as well, while keeping an eye on FLNG projects. NIGEC is in talks with more than 170 foreign companies, which have aired their willingness to return to Iran once the sanctions are lifted.

Kameli did not name any company, but it seems that he was referring  to Royal Dutch Shell Plc as “the biggest FLNG shipping server”, when its CEO Ben van Beurden traveled to Tehran in June. The company, which has a $2.3 billion debt to Iran, also owns the  biggest FLNG ship in the world.

Shell’s Prelude FLNG facility is able to produce at least 5.3 million tons per year of liquids: 3.6 mt/y of LNG – enough to easily satisfy Hong Kong’s annual natural gas needs – 0.4 mt/y of liquefied petroleum gas and 1.3 mt/y of condensate (equivalent to 35,000 barrels per day), the company’s official website says.

Previously, the deputy head of National Iranian Gas Company, Manouchehr Davoudi, mentioned Shell company’s capacity to serve Iran with FLNG facilities during an article, published on Oil Ministry’s official website.

Responding to Iran's FLNG shipping needs, Nureddin Wefati, the head of media relations in MENA at Shell EP International Ltd., told Natural Gas Europe, “There is no possibility for Shell to move forward with new business in Iran until there has been significant change in the sanctions environment.”

Iran and P5+1 reached a political nuclear agreement in early April and are negotiating to reach a comprehensive nuclear deal by July 7 to pave the way for lifting western sanctions imposed on Iran.