Russian Interest in Gas Projects

Russian Interest in Gas ProjectsRussian Interest in Gas Projects

Two Russian firms have expressed readiness to invest in Iranian gas projects, managing director of the National Iranian Gas Company (NIGC) said, ISNA reported.

"Negotiations have been held with several international companies and some agreements have been reached, but are yet to be finalized," said Hamidreza Araghi.

Close to $21 billion investment is needed to increase the refining capacity by March 2018. "The upstream sector is expected to finance the project," he said without elaboration.

Petrochemical projects require massive investments, including $34 billion for gas transfer, $3 billion for gas storage, and $4.5 billion for gas delivery to 3.5 million households. Gas distribution and delivery projects will be funded under Note 2(G) of the national budget in the present calendar year ending March 2015. Note 2(G) establishes the investment framework for the oil ministry, allowing it to invest up to $100 billion in oil and gas projects in line with Article 44 of the constitutional to help open new opportunities to the private sector and boost privatization.

To reach the said goals by the next four years, a total of $62 billion is needed, $20 billion of which is expected to be funded by the government from refineries.

Earlier this year, Oil Minister Bijan Namdar Zanganeh and Russian Energy Minister Alexander Novak signed four economic and commercial agreements, including the construction of eight new power plants in Iran by Russian firms.

NIGC also signed a MoU in September with a Russian company for the construction of Iranshahr-Chabahar pipeline, which requires $700 million worth of investment.