Foothold in Middle East Gas Market Expanding

Foothold in Middle East Gas Market ExpandingFoothold in Middle East Gas Market Expanding

As soon as Iran's gas pipeline projects with Iraq and Oman go on stream, Kuwait will be the next destination to receive the gas-rich Persian Gulf state's natural gas, the head of Iranian Gas Engineering and Development Company said on Monday.

"Tehran is planning to expand its foothold in the Middle East's promising energy markets in the post-sanctions era, including Kuwait, the UAE and Saudi Arabia," Hassan Montazer Torbati was also quoted as saying by ILNA.

Asked about the Iran-Iraq gas pipeline, the official said that the contract to supply gas to Basra and Baghdad has already been signed and the mega project is being undertaken gradually in Iraq due to security reasons.

"Gas export to Baghdad will commence in the current Iranian year (started March 20). Moreover, extending a 142-kilometer pipeline to Basra from Iran gas trunkline VI has been planned to be completed next year," he said.

"Based on the contract, gas export will start at 10 million cubic meters per day and gradually reach 25 mcm/d. There are plans to increase exports to 30-50 mcm/d in future, if the Arab state meets the contractual terms."

Torbati said the construction of natural gas pipeline to transfer Iran’s gas to five Iraqi power plants, including Rumaila, Shatt al-Basra and al-Najibiyah has made 82% progress in Iraq.

Tehran and Baghdad signed a draft deal in 2013 to transfer Iran’s gas to two Iraqi power plants.

A 270-kilometer pipeline stretches from Charmaleh, a village located in the western province of Kermanshah in Iran, to Naft Shahr, a town bordering Iraq and then to power plants in Baghdad. A second route, with a capacity of 30 mcm/d, will pass through Basra.

  Iran-Oman Pipeline Development

According to reports, feasibility studies for laying a subsea pipeline that will connect Iran's gas facilities in the south to Oman are coming to an end in the near future.

Tehran and Muscat have cautiously pushed forward a hefty $60 billion project to deliver Iran's natural gas to Oman through a 260-kilometer subsea pipeline in the Persian Gulf. The pipeline, which is expected to be laid by 2019 at a cost of $1 billion, will supply 28 million cubic meters of natural gas per day (10 billion cubic meters a year) from Iran to Oman under a 25-year contract.

  IGAT9 Initiative on Schedule

Torbati hoped that IGAT9, with a length of 1.863 km, starts from Assalouyeh and passes through Ahvaz, Dehgolan and Bazargan through 17 compressor stations before terminating at the northern Bazargan just north of the Maku town.

To be implemented by the yearend, the project's estimated cost is around $7 billion. Upon completion, the pipeline will be capable of transferring 100 mcm of natural gas per day.  

Iran wants to diversify its gas exports, which are concentrated in the north, by reaching out to Persian Gulf countries in the south. It is planning to boost gas production capacity from 420 million cubic meters per day at present to 1 billion cubic meters a day in 2017 and to 1.2 bcm/d by 2020.