23 May 2016 - 10:13
  • News Code: 261307
Wait for Iran's Gas Surprise after Oil

TEHRAN, May 23 (Shana) -- After increasing both Iran's oil production and exports by about one million barrels per day since elimination of sanctions in mid-January, it is the time to wait for Iran's gas surprise.

Iran's actual sweet gas production level increased to above 178bn m3 last year, while the raw gas production capacity reached 260bn m3/yr, thanking to commencing new phases of giant gas field with Qatar, South Pars.

Iran has boosted the raw gas output from this field to above 46bn m3/yr last fiscal year, which ended on March 21, but 5 new phases are expected to become operational during current year. The final production capacity of these 5 phases is about 55bn m3/yr and some of them are currently producing gas with half capacity.

The Iranian side of South Pars has been divided to 24 phases, of which stages 1-10, 12, 15 and 16 are fully operational now.

Once, the all 24 phases of this filed become operational by 2019, the country's raw gas production capacity would increase from the current 260bn m3/yr to around 390bn m3/yr.

However, South Pars is not the all of Iranian gas story. The country has introduced 52 oil and gas fields for foreigners based on a new designed contract model, so called Iran Petroleum Contract, or IPC.

دالغا خاتين اوغلو

Among the introduced fields, there are 21 gas fields, of which only two are brown fields with the current 28mn m3/d output. Once, the all of these fields become operational, about 380mn m3/d of gas would be added to the production level, while the produced associated gas from the oil fields would add further 200mn m3/d to the output level as well.

It is not clear how much the foreign companies invest in these fields based on IPC, but Iran hopes to attract $30b in coming years. In total, Iran has planned to invest $231 billion investment (including foreign funds) in upstream oil and gas projects by the March 2025.

For now, the natural gas shares above 68 percent in Iran’s total primary energy consumption, but gasification of further 2 million households, tripling gas re-injection to to oilfields to around 100bn m3/yr as well as boosting gas deliveries to power plants by more than 20bn m3/yr of gas to power plants to curb liquid fuels burning in this sector is in agenda.

In total, Iran would have a significant amount of surplus gas to be exported, not only thanking to the production increase, but also due to fuel conservation projects.

Iran’s Fuel Conservation Organization plans to spend over $16bn on improving energy efficiency projects to save $170bn – over ten times more – in fuel.

Beside upstream sector, Iran has $55.8bn worth gas transit projects in next 10 years, including several cross-country pipelines, enabling the country to export gas in several directions. For now Iran export about 9.7 bcm gas to Turkey, but there are around 100mn m3/d of gas export deals with Iraq, Pakistan and Oman.

The country also has a 10.5mn mt/yr-LNG plant, developed by 50%, aimed to liquefied 14bn m3/yr of gas and export to foreign markets, including EU by 2019.

Dalga Khatinoglu is a Natural Gas Europe expert on Iran's energy sector and head of Trend Agency's Iran news service
News Code 261307

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