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Iran has boosted gas production to 880 mcm/d.
Iran has boosted gas production to 880 mcm/d.

Iran's Gas Export Market Facing Challenges, Opportunities

Supplies to Turkey and Iraq would take gas exports to the feasible level of 80 million cubic meters a day

Iran's Gas Export Market Facing Challenges, Opportunities

Iran sees the prospect of raising natural gas exports by more than twice the current level in a few years while facing challenges to tap into some of regional markets.
The country has taken steps to ramp up gas exports to neighbors. It continues to deliver 30 million cubic meters per day of gas to Turkey under a 25-year contract signed in 1996 despite being challenged by an Ankara court.
Gas flow to Turkey is not expected to change up to 2020, ISNA said in a report on Sunday, but the prospect of increasing exports to Iraq will be the main driver of Iran's gas export initiative.
Iraq started receiving Iranian gas in June, state-owned oil company, NIOC, said at the time. Exports began at a rate of 5 million cubic meters a day, but is planned to reach 25 mcm/d in 2018 before topping out at 50 mcm/d in 2020.
Supplies to Turkey and Iraq would take gas exports to the feasible level of 80 million cubic meters a day. But from there, Iran will face an uphill task to lift exports by meaningful amounts.
The country is mulling over a plan to sell natural gas to Oman, south of the Persian Gulf through a subsea pipeline. In February, Tehran and Muscat signed a preliminary agreement on the pipeline project that is estimated to cost $1.2 billion. But the project is still at an embryonic stage.
Based on an earlier agreement in 2013, Oman would take in 28 mcm/d of gas from Iran for 15 years.
According to IRNA, the sultanate could seek to import as much as 20 billion cubic meters a year of Iranian gas, or more than 50 mcm/d, to meet its demand.

--- Pakistan Out of the Picture
Pakistan, meanwhile, seems to be a less likely source of gas revenue for Iran.
The two countries have been involved in talks over constructing a gas pipeline that would stretch more than 2,700 kilometers from Asalouyeh in southwest Iran through the Pakistani provinces of Balochistan and Sindh.
According to reports, about 900 kilometers of the pipeline have been laid in Iran, but Pakistan has dithered over constructing 700 kilometers of the pipeline in its territory. The pipeline was envisaged to carry over 20 mcm of Iranian gas daily to Pakistan.
Some officials and analysts say low LNG prices in international markets have diverted Pakistan's attention from the IP gas pipeline project toward attractive options such as Qatar's LNG.
Iran (34 trillion cubic meters) and Russia (32.6 tcm) hold the largest proven gas reserves, according to BP Statistical Review of World Energy.
Latest surveys on hydrocarbon fields also show that the country's recoverable natural gas reserves have risen by 283 billion cubic meters.
The country has boosted gas production to around 880 million cubic meters per day, with over two-thirds of that amount coming from South Pars, the world's largest gas field shared by Iran and Qatar in the Persian Gulf.
The country aims to raise output to over 1 billion cubic meters by March 2018. More than 146 bcm of natural gas were produced from South Pars in the previous fiscal year, or 400 million cubic meters daily.

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