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Gas Overconsumption Threatens Exports

Gas Overconsumption Threatens ExportsGas Overconsumption Threatens Exports

Iran's energy consumption is even higher than China's, whose population is more than a billion, secretary-general of the Gas Exporting Countries Forum said.

"Uncontrolled consumption of energy in Iran can be a threat to gas export," Mohammad Hossein Adeli also told ISNA.

Last week, Azizollah Ramezani, a senior gas industry official, criticized the lack of strategy to curb energy consumption.

"The more we consume energy domestically, the more we lose export markets," he said.

"Plans should be made to develop gas industry, as it accounts for 60% of energy resources in Iran."

As oil price has plunged to 11-year lows, gas export to Europe can also be economically viable as overall prices seem to be reaching the same level. Moreover, India and China can also be profitable markets for Iranian gas.

Underscoring the necessity of increasing Iran's share of global gas market and adjusting it with domestic usage and resources, Adeli said, "As gas is a source of Iran's power in the global arena, we should utilize it properly."

Experts speculate that around 70% of global gas output are consumed by producers and only 30% are exported, and that domestic consumption will soar to 3.6 tcm in 2040 from 2.5 tcm a year in 2015, while exports will improve from 1.1 tcm per year to 1.8 tcm in the same period.

Describing the large number of gas subscribers in Iran as "unique", Adeli said Iran and Saudi Arabia are the top energy wasting countries.

"Tehran can become a major gas supplier to Riyadh in the near future because around 50% of Saudi Arabia's petrochemical production capacity are untapped due to gas shortage … The Saudis will have no way but to import gas from Iran or Qatar to justify their $100 billion investment in the petrochemical sector," he said.

This is while the two countries have cut off their political and economic relations following the Saudi execution of top Shia cleric Sheikh Nimr al-Nimr last Saturday, which fueled the anger of Iranian leaders and citizens.

In view of the current hostile relations, gas export to Saudi Arabia seems rather improbable, at least in the near future.

On the role of gas in international relations and whether it can be used as a political tool, Adeli referred to clashes between Russia and Ukraine over gas supply and said, "Gas and oil are linked with geopolitical issues."

Financialtribune.com