$2b Needed to Expand Nat'l Gas Network

$2b Needed to Expand Nat'l Gas Network$2b Needed to Expand Nat'l Gas Network

The country needs $2 billion to expand the natural gas network to cover industrial units nationwide, said a top advisor to oil minister.

"About $885 million of the required amount have been funded from Note 2(G) of the Budget Law and the Iranian National Gas Company’s resources since the beginning of the current Iranian year (started March 21)," added Mahmoud Astaneh.

Astaneh made the statement at a conference in East Azarbaijan Province on supplying gas to industrial parks and industrial production units of the region.

The event is aimed at picking up the pace on the process of implementing Note 2(G) of the Budget Law that stipulates supplying gas to cities, villages and industries that are currently using liquid fuels, which need to be incorporated in the national gas grid. The note establishes the investment framework for the Oil Ministry, allowing it to invest up to $100 billion in oil and gas projects to create new opportunities for the private sector and boost privatization.

Astaneh stressed that the approach adopted by the Oil Ministry and NIGC is to develop the infrastructure to use gas as feedstock in major industries.

"By supplying gas to the remaining number of villages, NIGC has claimed the largest share in creating employment, which is slated to increase even further," he said.

Gas delivery to 3,800 small towns and villages across Iran is now underway and 5,200 more villages are in line to receive gas in the near future. Astaneh stressed that the progress has developed satisfactorily so far and villages with a population of over 20 households will be integrated into the extensive national gas network by March 2018.

Nearly 90% of the country have access to gas and the figure will reach 97% upon the completion of major gas projects within the next few years, according to government officials.

Managing Director of East Azarbaijan Gas Company Valiollah Dini said currently 59 towns and 1,360 villages in the province have access to natural gas, which includes the entire urban and 84% of rural populations. He said 240 more villages will be added by the end of the current Iranian year (March 19, 2016), and the number will increase to 1,051 by March 2018.

Last month, Oil Minister Bijan Namdar Zanganeh said more than $667 million had been invested in expanding the natural gas network over the course of the past six months.