New LNG Production Units to Be Constructed

New LNG Production Units to Be ConstructedNew LNG Production Units to Be Constructed

Serious negotiations are underway with domestic and international enterprises to construct new liquefied natural gas installations, managing director of National Iranian Gas Export Company said on Tuesday.

“Due to restrictions on transferring natural gas via pipelines, a part of Iran's natural gas must be exported to far-flung target destinations in the form of LNG. Fulfilling such an objective calls for creating the much-needed infrastructures and the supply of cutting-edge equipment,” Alireza Kameli was quoted as saying by IRNA.

Underscoring the fact that development of LNG industry can definitely help Iran play a key role in capturing international gas markets, the NIGEC chief regretted that most LNG projects have not been completed yet.

According to the official, removal of sanctions in addition to Iran's access to state-of-the-art knowhow to build LNG units can pave the way for the Persian Gulf state's strong presence in such a strategic commodity market because of which NIGEC has launched a new round of talks with some domestic and foreign manufacturers.

Expressing hope that current negotiations will come to fruition as soon as possible, Kameli said, "The longer they linger, the more lossesthey will incur."

Stressing that the applicant companies have already submitted their development proposals, Kameli said as soon as policies adopted by Oil Minister Bijan Namdar Zanganeh are announced, the final decision will be taken. "Out of three LNG initiatives, namely Persian, Iran and Pars LNG, two have been brought to a temporary halt due to sanctions," Kameli said, noting that Iran's LNG project has made 50% progress.

  Global Interest

Many states, including Oman, India, South Korea and France, have expressed interest in taking over LNG projects in Iran, which is one of the world’s largest owners of gas resources.

According to reports, 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 economic calculations reveal LNG production is economically feasible, given the current market conditions.

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

Iran wants to diversify its gas exports, which are concentrated in the north, by reaching out to Persian Gulf countries in the south. The move comes as Iran 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 billion cubic meters per day by 2020.