NIGEC, Kuwait, UAE Discuss Gas Deals

NIGEC, Kuwait, UAE Discuss Gas DealsNIGEC, Kuwait, UAE Discuss Gas Deals

Kuwait and the UAE are willing to import natural gas from Iran, said managing director of National Iranian Gas Export Company.

Referring to the new round of gas negotiations with the Persian Gulf littoral states, Alireza Kameli added that some Arab states have shown interest in purchasing natural gas from Iran, Shana reported.

According to Kameli, talks have been held with some Emirati companies to sell gas. Furthermore, there seem to be two available scenarios with respect to exporting gas to Kuwait through a pipeline.

Stressing that serious negotiations are underway with Kuwaiti gas officials, Kameli said, “The first possible route to export gas to Kuwait would be via Basra in Iraq, which requires a short pipeline to be laid to connect Iran’s gas network to that of Kuwait.”

“The second route is through Bandar Genaveh, capital of Genaveh County in Bushehr Province,” he said, stating that in this way, gas can be transferred to Kuwait through the sea.

Highlighting the considerable amount of gas sought by Kuwaiti officials, Kameli said, “This is going to be a lucrative contract, the details of which will definitely be announced upon its conclusion.”

Kuwaiti Oil Minister Ali Saleh al-Omair said in June his country was looking to sign an agreement with Iran to secure much-needed natural gas supplies. The scale of Iran’s gas reserves means the country would be able to shift decisively toward exports when sanctions are lifted, a senior official at the National Iranian Gas Company said.

“Iran has focused for many years on local production and consumption, but now there are plans to expand activities outside Iran provided sanctions are lifted,” said Azizollah Ramezani, director for international affairs at the National Iranian Gas Company.

“Currently, Iran has nearly 100 mcm/d of gas ready for export.”

Iran aims to export around 200 mcm/d of gas by 2020. “Iran’s priority for gas export is the regional market as most countries around Iran need gas, especially for their power plants. After that, [we will look at] the European and Asian markets,” Ramezani said.

“European consumption is more than 500 billion cubic meters per annum and local production from Norway and the Netherlands is going to decrease, so they will need additional gas.”

Ramezani said Iran can play a key role in supplying gas to Europe as they are going to diversify their suppliers. Gas production in Iran is more expensive than it should be, said the official, but the country’s proximity to Persian Gulf gas buyers will give it a competitive advantage. “Our competitors might be Azerbaijan or Turkmenistan,” he said. “But they are further away [from Persian Gulf gas buyers]. So our finished cost will be lower.”

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.