Ministries Dispute Over Gas, Electricity Export

Ministries Dispute Over Gas, Electricity Export
Ministries Dispute Over Gas, Electricity Export

Disagreements between Iran's oil and energy ministries have hampered projects for increasing the supply of feedstock gas to power plants and exports to neighboring countries.

Disputes on whether to prioritize the export of gas or electricity emerged during the tenure of the incumbent government, Mehr News Agency reported.

Alireza Kameli, managing director of National Iranian Gas Export Company, told Shana on Wednesday that five domestic firms are in talks with NIGEC to use natural gas for the production and export of electricity.

"Preliminary agreements have been reached with the [unnamed] companies," he said.

However, these companies must get the approval of Iran Power Generation, Distribution and Transmission Company (Tavanir) before they embark on power production and export.

Tavanir has until now declined to issue permits for the projects, posing a new challenge to the conflict.

Two years ago, Oil Minister Bijan Namdar Zanganeh had objected to the sales of electricity to foreign customers on the grounds that "inexpensive electricity export is rivaling the export of gas".

On the non-viability of electricity export, Zanganeh recently explained, "Assuming that we are selling every cubic meter of gas to Turkey for 40 cents, they use most of the volume to generate power that would cost them five to ten cents for each kWh. If we export seven-cent electricity to the country, will they purchase Iranian gas anymore?"

This is while Energy Minister Hamid Chitchian has said that the export of electricity, by prioritizing regional states, is in line with the policies of "Resistance Economy", underlined by the Leader of Islamic Revolution Ayatollah Seyyed Ali Khamenei.

Resistance Economy is aimed at promoting economic self-reliance by promoting domestic non-oil production and reducing oil dependency.

"If Iran, which owns the largest global gas reserves, cannot generate and export electricity, where in the world is power export economically viable?" Chitchian said.

In view of the disagreement between the two ministries, the merger of which has also been proposed, both sides seem to insist on their stand.