Blizzard Triggers Rise in Domestic Gas Demand

Cheap tariffs and subsidies have led to profligate use of the fossil fuel in Iran.Cheap tariffs and subsidies have led to profligate use of the fossil fuel in Iran.

Natural gas consumption in Iran's household sector hit 550 million cubic meters on Monday, as cold weather continued to sweep across many regions, the spokesman of National Iranian Gas Company said.

"Gas consumption has been 80 million cubic meters above the average levels over the last three days, yet sustainable gas supply to power plants and heavy industries has not been interrupted," Majid Boujarzadeh was also quoted as saying by Shana on Tuesday.

"Normal gas consumption in the country ranges between 420 to 470 mcm," he added.

Iran's gas production capacity stands above 800 million cubic meters per day.

According to the official, 90 mcm of the strategic fuel were delivered to power plants and industries on Monday.

"Close to 106 mcm/d of gas are used in power stations," he said.

Boujarzadeh noted that if subscribers decrease their home temperature by 2 degrees centigrade, as much as 50 mcm of gas can be saved daily, which is equivalent to the natural gas produced in two phases of the giant South Pars Gas Field per day.

Reportedly, almost 40% of Middle East’s gas consumption take place in Iran, an unreasonably high level by any standard. The residential sector is the largest consumer, followed by power plants.

"It is predicted that gas use will soar to 560 mcm by the end of the week," Boujarzadeh said, adding that gas exports to neighboring states, namely Turkey and Iraq, have not been affected by the unprecedented domestic use.

According to the latest government data, gas production is around 880 million cubic meters per day. More than 90% of the gas export, or 30 mcm/d, go to Turkey.

"Iran’s daily gas supply to the Iraqi capital Baghdad has increased to 12 million cubic meters from about 7 mcm/d since supply began last June," he said.

With a population of 80 million, Iran burns more than 140 billion cubic meters of gas annually, not far from China, the world’s second-largest economy and the most populous country in the world, which consumed a total of 191 billion cubic meters in 2015, data show.

According to Oil Minister Bijan Namdar Zanganeh, Iran is on pace to boost gas production to 1 billion cubic meters a day by March 2019, roughly the same time when all South Pars phases are planned to be up and running.

Abundance of natural gas, coupled with cheap tariffs and subsidies, has led to profligate use of the fossil fuel in Iran. Analysts and experts have long argued that unless the government scales back heavy energy subsidies, the wasteful consumption pattern will endure.

--- Constant Supply

According to managing director of Iranian Central Oil Fields Company, Ramin Hatami, ICOFC subsidiaries are all geared up to constantly supply the much-needed fuel to subscribers during the cold winter days.

Iranian Central Oil Fields Company has three subsidiaries, namely West Oil and Gas Production Company, East Oil and Gas Production Company and South Zagros Oil and Gas Production Company.

"Operations to extract natural gas from reservoirs in the northeast is being carried out as planned," Mohammad Mambeigi, the chief executive officer of EOGPC, said, adding that if called upon by the National Iranian Gas Company, production of more natural gas will be put on the agenda.

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