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France Interested in Iranian LNG Projects

France Interested in Iranian LNG ProjectsFrance Interested in Iranian LNG Projects

Following Oman, India and South Korea, France has also expressed interest in taking over liquefied natural gas projects in Iran, which is one of the world’s largest owners of gas resources.

According to ISNA, although many LNG and mini-LNG plans were due to become operational in the past few years, none has gone on stream because of the imposition of western sanctions against the Persian Gulf country and underinvestment.

As a result, the lion’s share of Iran’s LNG output is consumed domestically and foreign customers are limited to a few neighboring countries.

In the post-sanctions era, Iran has reiterated that it aims to raise LNG exports and expand its reach in the international markets while neighboring countries, which can receive Iranian gas via pipeline, are still prioritized over more distant countries.

Officials say establishing new LNG production units, instead of constructing pipeline, tops Iran's agenda for transferring gas to Europe, since economic calculations reveal LNG production is more economically efficient given the current market conditions.

Concurrent with Iran’s growing interest in increasing its market share, especially in European Union countries, international LNG markets have faced a series of fluctuations due to the large importers’ reduced demand for fuel, because of its relatively high price and the emergence of inexpensive alternative fuels.

Hamidreza Araqi, managing director of National Iranian Gas Company, has said the country will enter new LNG markets, even if it would not be profitable.    

According to the official, the country is aware of the current market situation, but the Persian Gulf country should acquire the knowhow.

According to plans, the country's annual gas exports, including LNG, should rise to 80 billion cubic meters by 2021.

In spite of low profitability in the implementation of LNG projects, many international companies have expressed eagerness to undertake the construction of LNG plants in Iran.

Following Oman, India and South Korea, which have recently signed a memorandum of understanding on the implementation of LNG and mini-LNG projects, France’s oil and gas giant Total intends to build such units in the Middle East country.

Total boasts of experience in undertaking many LNG projects worldwide and based on the latest data, it has raised its LNG sale by 6%, making le sales reach 2.64 million tons.

Iran LNG and gas export plans to Oman could give momentum to the country’s LNG industry. Iran LNG is under development at Tombak Port, approximately 50 kilometers north of Asalouyeh in Iran's Bushehr Province. The project includes two LNG production lines, each with a capacity of 5.4 million tons of LNG per year.

 

Financialtribune.com