Iran to Increase Gas Condensate Exports

Iran to Increase Gas Condensate ExportsIran to Increase Gas Condensate Exports

The National Iranian Oil Company is set to raise gas condensate exports to meet increasing demand from foreign customers, the company's managing director said, playing down speculation about new crude export contracts.

“Although NIOC is capable of delivering more gas condensates to new and traditional customers, we are unlikely to sign new long-term oil contracts as long as we don't have access to the technology to ramp up production,” Ali Kardor, who also is deputy oil minister, was quoted as saying by IRNA.

After meeting the needs of domestic refining companies, which is almost a million barrels per day, the rest of the output of 3.8 million bpd, is exported to target destinations.

"Iran, OPEC’s third-biggest producer, now exports 2.3 million bpd plus 500,000 barrels of gas condensates."

Asked about denying more oil exports to Japan, Kardor noted that Iran cannot exceed its current oil exports because it cannot immediately boost the production capacity.

Referring to plans to increase production from oil fields, Kardor said, "West Karoun Oilfields, which produce heavy oil, are the only fields whose total output has recently increased. However, due to the lack of cutting-edge technology, production at other fields increased marginally, thanks to old techniques like injecting gas into the fields."

Stressing that oil output from West Karun oilfields has tripled compared to 2013, the official  said, “Iran produced 76,000 barrels of oil per day from the field in 2013. Nonetheless, the extraction has now reached more than 200,000 barrels per day.”

West Karun, located in southwest Iran, includes Yaran and Mansouri fields as well as Yadavaran and North and South Azadegan joint fields with Iraq.

Mohsen Qamsari, director of international affairs at NIOC, had announced earlier that Iran is not ready to provide the Hungarian multinational oil and gas company MOL with light crude.

Commenting on negotiations with MOL, the official said the Hungarian firm is seeking  40,000 barrels of light crude a day from Iran.

  Jump in Condensate Output

"Production of gas condensates in the South Pars Gas Complex exceeded 77 million barrels in the last five months of the current Iranian fiscal year that started in March," Masoud Hassani, managing director of SPGC,  said, noting that of the total output, 62 million barrels were exported and the remainder sold to Iran's Borzouyeh Petrochemical Company, also known as Nouri.

Iran, which plans to pump crude at the pre-sanctions levels of more than 4 million bpd, has agreed to attend an informal meeting later this month among members of the Organization of Petroleum Exporting Countries and non-OPEC producers in Algeria expected to revive a deal on freezing global output.

The country's oil production has surged by 730,000 barrels per day since the end of 2015, the largest gain for any OPEC country. With the easing of sanctions, Iran is seriously flexing its oil muscles in hopes of luring back foreign energy companies.

"Iran has been very successful at ramping up crude production since the sanctions were lifted," said Julius Walker, senior consultant at research firm JBC Energy. "It is difficult to say whether they will be able to maintain or grow these levels further."