Iran Keen to Enhance Role in Int'l Gas Market

Iran Keen to Enhance Role in Int'l Gas Market
Iran Keen to Enhance Role in Int'l Gas Market

Iran is keen to play a bigger role in the global natural gas market by raising annual gas production capacity to 330 billion cubic meters in two years, Deputy Oil Minister Hamidreza Araqi said.

"Holding [some of] the world's largest gas reserves, the Islamic Republic pursues different scenarios to boost the export of natural gas and have a stronger presence in the global gas market," he was quoted as saying by Shana on Tuesday.

"Boosting gas export is one of the top priorities of the sixth five-year economic development plan (2016-21)."

Referring to the Third Gas Exporting Countries Forum scheduled for November 23 in Tehran, Araqi said the summit would be a platform for devising policies and exchanging information instead of making decisions on global gas prices.

The GECF, established in Tehran in 2001, is an intergovernmental organization of 11 natural gas producers, namely Iran, Algeria, Bolivia, Egypt, Equatorial Guinea, Libya, Nigeria, Qatar, Russia, Trinidad and Tobago, and Venezuela.

GECF members together control over 70% of the world’s natural gas reserves, 38% of the pipeline trade and 85% of the liquefied natural gas production. The three largest reserve-holders in the GECF—Iran, Russia and Qatar—together hold about 57% of global gas reserves.

Russia's President Vladimir Putin and his Energy Minister Alexander Novak and Iraqi President Fuad Masum have confirmed they will attend the GECF Summit in Tehran.

Amirhossein Zamaninia, another deputy minister, said in a statement that gas output is set to reach 1.3 billion cubic meters per day by 2021, an ambitious plan that would turn Iran into one of the world's biggest gas producers in the next decade.

"Iran will naturally turn into a major player in international gas trade, holding more than 33 trillion cubic meters of the world's gas reserves," he said.

  Making Up for Lost Ground

Iran's oil and gas reserves have experienced years of underdevelopment over the past few years as a consequence of the US-engineered financial and trade restrictions. Many international companies were forced to abandon exploration and drilling projects in Iran in fear of violating trade embargos with the Persian Gulf country.

Some of the contractors, mainly the Chinese who maintained operations despite sanctions, largely failed to live up to their commitments in developing the country's hydrocarbon fields.

But the landmark July 14 nuclear accord between Iran and six world powers and the looming prospect of an end to sanctions by early 2016 has spurred Tehran to rekindle negotiations with international companies to develop its oil and gas fields.

Iran holds the world’s second biggest natural gas reserves after Russia, having roughly 17% of global proven gas reserves. Its largest natural gas field, South Pars, supplies more than 50% of the country's gas demand.

Tehran is planning to expand gas export to European and Asian markets in the form of liquefied natural gas.

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

Iran currently exports natural gas via pipelines to three neighboring countries, namely Turkey, Armenia and Azerbaijan. Ankara receives more than 90% of Iran’s gas exports under a long-term contract, and Yerevan and Baku receive around 6% and 3% of Iran’s gas exports respectively under swap agreements.