Iran Gearing Up for New Gas Markets

Iran Gearing Up for New Gas MarketsIran Gearing Up for New Gas Markets

Iran is keen to start natural gas supply to Pakistan in three years and to the Iraqi city of Basra by the end of 2016 while weighing up gas export plans to India, as part of efforts to claim a bigger stake in the international gas market.

"Upon the completion of [Iran-Pakistan Gas Pipeline] infrastructure in Pakistani territory, Iran will start exporting 20 million cubic meters per day to the neighboring country over the next three years," Alireza Kameli, the National Iranian Gas Export Company's managing director, told IRNA.

He also said two contracts have been signed with Iraq so far on delivering gas to the Iraqi capital of Baghdad and Basra in southern Iraq.

"The Baghdad project has reached the final phase of development, but the infrastructure of supplying Basra with Iranian gas is to be fully developed next year," he said.

With the implementation of the two contracts, Iran's gas export capacity will be doubled, reaching 40-70 million cm/pd.

Tehran currently exports over 10 billion cubic meters of natural gas annually via pipelines to three neighboring states, namely Turkey, Armenia and Azerbaijan. Ankara receives more than 90% of Iran’s gas exports.

Iran plans to raise its gas output capacity from the current 650 million m3/d to more than 1 trillion m3/d over the next three years.

Kameli said gas exports to India can be carried out via both maritime pipeline or LNG cargoes, adding that due to its growing energy consumption, India can turn into a secure market for the Iranian gas.

On foreign companies' interest in Iran's LNG and floating liquefied natural gas projects, the NIGEC chief said, "Foreign investors' proposals to undertake these projects are being investigated and the best option will be chosen."

  Farzad-B Gas Field

Although Iran and India have held intense negotiations on handing over the Farzad-B gas field's development phases, the Persian Gulf country has warned that if talks underway go nowhere, the project will be put out to an international tender.

Earlier in November, Iran lined up 52 oil and natural gas projects worth an estimated $185 billion for 335 domestic and foreign companies in Tehran, a day after it unveiled its long-in-the-works framework for new oil and gas contracts, known as the Iran Petroleum Contract. Three projects related to Farzad B, Yadavaran Phase 2 and North Azadegan development were eliminated from the list of projects open for foreign contractors and will be tendered in future.

A second conference is scheduled to be held in London on February 22-24 for a thorough presentation of the multibillion-dollar oil and gas projects.

According to speculations, Iran will put the Farzad-B project on tender in this conference for potential contractors, if the current negotiations with India do not lead to a deal.

Earlier this year, Oil Minister Bijan Namdar Zanganeh described Farzad-B as the only Iranian project "promised" to a foreign contractor.

The Wall Street Journal reported in September that ONGC Videsh Ltd, the overseas arm of India's state-owned Oil and Natural Gas Corp., had submitted a $10 billion proposal to Iran for developing Farzad-B and shipping its gas to India

A consortium of OVL, Oil India and Indian Oil Corp. had discovered an estimated 363 million cubic meters of gas reserves, which later was named Farzad-B, in the Farsi block in 2008. But the Indians were forced to abandon the project after the United States and the European Union introduced tough sanctions against the Persian Gulf country.