Gas Production Capacity to Rise

Gas Production Capacity to RiseGas Production Capacity to Rise

Iran's gas production capacity will increase by at least 50 million cubic meters per day in the current Iranian year (ending March 19, 2016). According to the Oil Ministry's consultant, Mahmoud Astaneh, production capacity will reach 700 million cubic meters per day before the end of the current Iranian year, Mehr News Agency reported.

The rise in production will come from Phase 12 of South Pars Gas Field, set to come on stream this year, which will produce 100 million cubic meters of natural gas per day.

South Pars, the world's biggest gas field located in the Persian Gulf, is shared between Iran and Qatar. It is estimated to hold 51 trillion cubic meters of gas and around 50 billion barrels of natural gas condensates.

The Oil Ministry plans to develop the field in 24 to 30 phases. At its peak, South Pars will produce about 710 million cubic meters of natural gas daily. The project needs over $30 billion to be completed.

  Domestic Needs

Astaneh said 700 million cubic meters of natural gas per day will suffice to meet Iran's domestic needs.

Domestic gas consumption is around 500 to 550 million cubic meters of natural gas per day during winter.

Iran has been compelled in winters to undertake gas rationing in some parts of the country. Managing shortages has been a stressful part of the job of National Iranian Gas Company executives. However, Oil Minister Bijan Namdar Zanganeh said that "when Phase 22 of South Pars comes on stream, the country's gas supply and demand will be at equilibrium".

"We have put a rapid expansion of our gas network high on our agenda, as with new gas production we can even supply far-off villages," Astaneh was quoted as saying by Mehr News Agency.

"This will also help us cut consumption of other fossil fuels."

Kerosene, diesel and mazut are used for heating in Iranian villages and cold parts of the country, but the gas grid can cut their consumption. This could increase the export of these fuels, which is far more expensive than piped gas.

Widespread usage of piped gas will also help preserve the environment, as it can be delivered with low risk and produce fewer pollutants.

"With the completion of South Pars' phases, we expect Iran's gas production to reach 1.2 billion cubic meters per day by the end of the sixth five-year economic development plan in 2021," Astaneh said. The increasing production of Iranian gas, coupled with world's largest proven reserves, could help Iran become Europe's top supplier. It can deliver gas to Europe via a pipeline through Turkey. Such a pipeline would reduce Europe's reliance on Russian gas.