Plan to Diversify Gas Export Markets

Plan to Diversify  Gas Export Markets
Plan to Diversify  Gas Export Markets

Iran is planning to diversify gas export markets after the sanctions are lifted and will not limit supplies to its gas pipeline to Turkey, director for international affairs at the National Iranian Gas Company said.

"We are considering different routes to export natural gas to Europe. Besides Turkey, We can do this through Azerbaijan, Georgia and (by tankers) via the Black Sea," Azizollah Ramezani was quoted as saying by IRNA.

The official said Iran's gas export should reach 150-300 million cubic meters per day by the end of the sixth five-year economic development plan (2016-21), stressing that this target can be realized depending on factors such as export infrastructure and demand.

According to the US Energy Information Association, Ankara imports about 90% of Tehran's total gas exports, with supplies to Armenia and Azerbaijan under swap arrangements constituting the rest of the exports.

Iran also imports natural gas from Turkmenistan and Azerbaijan to meet domestic demand and for use in gas injection for oil production.

The Islamic Republic sees the removal of sanctions as an opportunity to modernize its aging energy infrastructure and raise production from its rich oil and gas fields in the Persian Gulf in cooperation with international companies.

The US-engineered sanctions have affected Iran's energy sector and prompted a number of cancellations or delays of major oil and gas projects.

Following the landmark July 14 nuclear deal between Iran and six world powers, many European and Asian delegations have arrived in the capital Tehran to explore opportunities for investment in the emerging energy sector and discuss oil and gas trade with the Persian Gulf country.

  Export Prospects

Ramezani ruled out negotiations on gas trade with foreign companies and said domestic demand will regulate gas exports.

However, negotiations are underway on shipping liquefied natural gas to foreign customers.

In September, Oil Minister Bijan Namdar Zanganeh discussed LNG supply to Spanish terminals and from there to other European destinations. Later that month, LNG exports were discussed with a Polish delegation in Tehran. Ramezani added that transfer of technology to develop the gas industry is as important as sealing gas export deals with foreign buyers.

Speculations suggest Iran has the capacity to supply 25-30 billion cubic meters of gas a year to Europe in the post-sanctions period. Iranian officials say gas exports, including LNG, should rise to 80 billion cubic meters per year by 2021.

More than half of Iran's natural gas output comes from South Pars, the country's biggest gas field shared with Qatar in the Persian Gulf.

The field covers around 3,700 square kilometers of Iran's territorial waters, adjoining Qatar’s North Field, which measures 6,000 square kilometers. It holds an estimated 40 trillion cubic meters of natural gas, or equal to roughly 8% of the world’s reserves and approximately 18 billion barrels of condensate.

A lack of modern technology and budget has hampered development of fields, allowing neighbors to draw the lion's share of underground reserves.

  Gas Swap With Russia

Azerbaijan's SOCAR said it is considering the possibility of transiting Russian gas to Iran.

SOCAR’s President Rovnag Abdullayev said on Friday Azerbaijani gas pipelines "can well be involved" in gas delivery to Iran.

“We haven’t received such a proposal and if the route is advantageous, it shouldn’t be ruled out,” he added.

He was commenting on reports about Russia’s Gazprom supplying gas to Iran.

Earlier, Russia’s Energy Minister Alexander Novak said Russia and Iran have agreed to gas swapping deals.

Novak noted that Russia could deliver gas to Iran’s north and receive the same volume of gas or LNG from Iran’s south through the swap deal.