Foreign Firms Interested in Gas Industry

Foreign Firms Interested in  Gas Industry
Foreign Firms Interested in  Gas Industry

Dozens of foreign companies have expressed their interest in investing in Iran's natural gas development projects, Shana news agency reported on Tuesday.

Representatives of 40 companies from Canada, Australia, Japan, South Korea, Malaysia, Russia, and China have held meetings with Iranian officials to discuss the possible ways of financing natural gas projects across Iran, a senior official with the National Iranian Gas Company said.

"These are companies that specialize in pipeline construction, refinery development, and construction of compressor stations," Asghar Soheilipour stated, adding that all foreign companies interested in investing in Iranian gas industry have received a special package, including project details, investment requirements and future tender information. "They see the possibility of a comprehensive nuclear agreement between Iran and the P5+1 as an opportunity to increase their share in the regional energy markets."

>>Billion-Dollar Projects

The government has a three-year plan to increase the daily natural gas output to more than one billion cubic meters, according to Mehr News Agency. Therefore, the oil ministry has started negotiating with domestic and foreign investors to finance its mega oil and gas projects.

The ministry recently announced that at least 30 billion dollars of investment is needed to finance the energy sector's development plans. According to Soheilipour, the projects that are being negotiated with the foreign companies include the completion of the 6th gas trunkline (IGAT6), construction of 9th and 11th trunklines (IGAT9, IGAT11), and Ilam Refinery's development project.

Moreover, the NIGC official said that Russian companies have announced their readiness to finance Iran's oil and gas projects.

Talking to IRNA, Soheilipour said that since Russians have halted several projects in Eastern Europe and Syria due to different political reasons, they are willing to finance Iranian projects.

"One company even proposed to allocate $2 billion immediately for Iranian gas projects," he said.

According to the official, a Russian company has financed a $700-million pipeline project to transfer natural gas from the southeastern city of Iranshahr to the port city of Chabahar on the shoreline of the Sea of Oman.

"The project will be completed in two years," he said.

The US and EU have imposed sanctions on Russia over what they allege as Moscow's role in the Ukraine crisis. Following the sanctions, Moscow voluntarily banned importing certain items from the western countries.

This has created an opportunity for Tehran to boost its ties with Moscow.

Back in November, the NIGC and Russia's energy company Gazprom signed a cooperation agreement. Deputy oil minister Hamidreza Araqi said that the agreement "would not only cover development of gas projects but would also include training and joint ventures in a bid to elevate the bilateral energy ties to new levels."

Araqi stressed that the agreement, however, was not an attempt by Iran and Russia to ‘reshape the global gas market'.

“Iran has great technical and engineering capabilities in natural gas production, and is willing to export such services to Russia,” Araqi said.

 “We hope that the level of gas cooperation between Iran and Russia will increase dramatically when the final draft of the agreement is signed by two sides,” he said.

>>>Oil Talks With Moscow

Iran's oil minister has confirmed negotiations with Russia over reduction of oil production by the two countries.

"We have proposed to the Russians a cut in production and now we are waiting to see how they will respond," Bijan Namdar Zanganeh said, adding that the two sides plan to continue their talks in this regard until reaching an agreement.

Russia, with a daily oil production of 10 million barrels, is the world's largest non-OPEC producer, so the oil prices, which have dropped below 50 dollars for the first time in five and a half years, could stop falling if Russia cuts its oil production.