Petchems, Tavanir Owe $3b to Nat’l Gas Company

Petchems, Tavanir Owe $3b to Nat’l Gas CompanyPetchems, Tavanir Owe $3b to Nat’l Gas Company

Debts of petrochemical complexes and Iran Power Generation, Distribution and Transmission Company (Tavanir) to the National Iranian Gas Company have reached nearly $3 billion, financial director of the NIGC said on Wednesday.

"The sum of unpaid dues to the NIGC has amounted to a whopping $3 billion," Pirouz Monjezi was quoted as saying by ISNA. According to the official, petrochemical plants, the National Iranian Oil Company, Tavanir, National Iranian Oil Refining and Distribution Company and other natural gas subscribers owe the NIGC $398 million, $994 million, $596 million, $165 million and $928 million respectively.

Comparing  NIGC's smaller, unpaid dues to other sectors with the amount of money its debtors owe the company, Monjezi said NIGC's debts have something to do with the loan it got from the National Development Fund to finance its development projects in 2006.

"The loan will be repaid from the revenues that the company generates by exporting gas," he said.

"Serious negotiations are underway with petrochemical complexes to make them pay their huge debts."

Stressing that power plants are reluctant to repay the outstanding debts for receiving natural gas as feedstock, the official conceded that there is no effective mechanism to make power plants repay their debts."

"However, no industry will be provided with free natural gas as feedstock,” he added, stressing that NIGC will apply whatever mechanism to force debtors to repay their dues.

Noting that the feedstock price is determined by the government, Monjezi said, “NIGC's share of selling each cubic meter of natural gas is clear. Needless to say, the Targeted Subsidies Organization has its own share.”

The price of feedstock is a decisive factor for domestic and international companies exploring investment opportunities in the Persian Gulf country's promising energy market.

According to reports, feedstock prices vary from 6 to 8 cents in the Middle East. Energy experts believe that power plants' low efficiency in Iran is linked to the cheap feedstock they are provided with and, surprisingly, they are not willing to pay for the inexpensive feedstock they receive from NIGC.   

Energy consumption in Iran is above global average.

According to the Paris-based International Energy Agency, Iran is the fourth biggest consumer of natural gas after the US, Russia and China, three of the world's leading economies with large populations.

The Persian Gulf country is also the world's fourth largest producer of natural gas. It produced 173 billion cubic meters of gas in 2014, the most after the US, Russia and neighboring Qatar. The National Iranian Gas Company was established in 1965 as one of the four principal companies affiliated to the Oil Ministry.