Iran to Draw on Diesel, Mazut Inventory to Offset Gas Shortage

Strategic stockpiles of diesel and mazut to be used as alternative fuels to run thermal power plants in northern provinces has increased considerably compared to last year, managing director of the National Iranian Oil Refining and Distribution Company said on Sunday.

“There is no concern about supplying power plants with feedstock,” Abbas Kazemi, who is also a deputy oil minister, was quoted as saying by Mehr News Agency.

The official made the statement to allay concerns over the suspension of gas imports from neighboring Turkmenistan that could affect the operations of power plants due to a shortage of feedstock gas.

According to Kazemi, diesel and mazut can be transported to power plants in the north by rail, tanker trucks or pipelines.

The Oil Ministry said in a statement on Sunday that Iran has halted natural gas imports from Turkmenistan after the northeastern neighbor cut supplies in an "illogical decision" that was aimed to pressure Tehran to clear its debts for past gas purchases from the Central Asian neighbor.

Ashgabat unilaterally stopped gas supplies to Iran in 2007 as the country was gripped by unseasonably cold temperatures that year. The move forced Iran to import Turkmen gas at a price that was nine times higher than that stipulated in a bilateral contract.

Commenting on the rise in Iran's natural gas output, Kazemi said consumers play a key role when it comes to curbing gas consumption, adding that judicious use of the hydrocarbon can certainly help get through the cold winter season when consumption is at its peak.

According to Mohammad Esmaeel Ebrahimzadeh, managing director of Gilan Province Gas Company a compressor station will go on stream in Amol in Mazandaran Province in February, which will transfer 200,000 cubic meters of natural gas per hour from Sorkhroud pipeline to Amol in the northern province of Mazandaran to help increase gas pressure.

Asked about the pipe-laying plan across the cities of Damghan, Kiasar, Sari and Neka, he said that the $153 million project is ahead of schedule and as soon as it becomes operational, gas supply to the northern regions will be expedited.

"Except for the power plants and cement factories which are running on fuel other than gas, all other industries and households are supplied with natural gas," Ebrahimzadeh said, noting that there is a big inventory of diesel and mazut.

Hamidreza Araqi, the managing director of National Iranian Gas Company, had played down concerns over a shortage of gas for heating homes and for power plants.

According to Araqi, plans are in place to speed up gas pipeline laying from the oil and gas-rich southern fields to the north if Turkmen gas is cut off.

He said any possible shortage of gas in the cold season can be avoided if consumption nationwide is reduced by 10%. Almost 27% of natural gas in Iran is consumed by households.