Iran, Armenia Negotiating Gas Export Rise

Iran, Armenia Negotiating Gas Export RiseIran, Armenia Negotiating Gas Export Rise

Iran's gas export to Armenia will witness a tenfold increase as soon as gas negotiations between the two sides are concluded, director of gas transmission operation district 8 said on Saturday.

"More than 1 million cubic meters of natural gas have been exported to Armenia daily since the beginning of the current Iranian year (ending March 19, 2016)," Yadollah Baibordi was also quoted as saying by Mehr News Agency.

Underscoring the fact that gas transmission and distribution infrastructures in northwest Iran are developed, the official noted that Iran's gas export to Caucasian countries, especially Armenia and Azerbaijan, can experience a noticeable rise.

According to the official, physical infrastructures such as pipelines, export terminals and compressor stations are in place and as soon as the final agreement is reached, 10 mcm of gas will be exported to Armenia daily.

Referring to Iran's capability to transfer more than 3 billion cubic meters of gas to Armenia per annum, Baibordi added that currently Iran barters its gas for Armenian's electricity.

"More than 250 mcm of gas have been exported to Armenia since the beginning of the current Iranian year," he said.

  Gas Swap With Azerbaijan

The official noted that Iran has received more than 140 mcm of natural gas from Azerbaijan and sent it to Nakhchivan Autonomous Republic via Iran's Gas Trunkline—aka IGAT. He noted that Iran's gas transfer volume to Nakhchivan has reached somewhere in the region of 130 mcm.

Needless to say, Iran receives 200,000 cubic meters of gas from Azerbaijan for swapping 1.5 mcm.

Baibordi believes that as soon as IGAT9—a 1,850-km ninth cross-country pipeline, which would start from South Pars Gas Field, in the Persian Gulf, to Turkish borders—go on stream, Iran's gas export to Turkey and Armenia will see a substantial rise.

Pointing to electro-compressor facilities, recently coming into operation in Tabriz, the official said, "The project helped increase Iran's gas export in northeastern Iran by 50 mcm per day."

Gas officials are also in talks with senior representatives from Azerbaijan about gas swap deals. The State Oil Company of Azerbaijan Republic said last month it was considering the possibility of swapping Russian gas to Iran, based on which Russia could deliver gas to Iran’s north and receive the same volume of gas from Iran’s south.

Iran hopes to raise gas export to 150-300 million cubic meters per day by 2021.

Deputy Oil Minister Hamidreza Araqi said in a statement Iran has boosted its gas production capacity to more than 700 million cubic meters per day.

"Annual gas capacity has reached 260 bcm," the official said, underlining the strategic importance of gas export as a means of reinforcing international relations.

"By implementing the comprehensive plan for gas industry in Iran, major developments are expected over the next six years," he added.

There are mixed estimates on which country holds the largest natural gas reserves. Iran (34 trillion cubic meters) and Russia (32.6 tcm) hold the largest proven gas reserves, according to BP Statistical Review of World Energy 2015. But the US Energy Information Association places Russia ahead of Iran with an estimated 49 tcm in reserves. Iran, Russia and Qatar together hold nearly half the world's proven gas reserves.

  Iran's Opportunity

 After Turkish air force downed a Russian warplane near the Syrian border last month, Turkey has reportedly turned to new gas suppliers to diversify imports as it is gearing for the worst in its standoff with Russia and Iran is a likely candidate to help Ankara meet its demand in the cold season.

The Persian Gulf country pumps around 30 million cubic meters of natural gas a day to Turkey, second to Russia with 16-17 billion cubic meters of annual supplies.

Tehran says it can ramp up gas exports to Ankara upon the launch of several phases of the country's South Pars Gas Field, with output expected to rise by 100 mcm/d from the southern field in the near future.