Greater Caspian Region Weekly Overview - July 19th
Iran
List of sanctions lifted from Iran’s oil, gas, petchemicals sectors
Iran and the P5+1 Group reached a comprehensive nuclear deal on July 14th. According to the 159-page agreement, these sanctions in oil, gas, petrochemical sectors were eliminated:
- Import and transport of Iranian oil, petroleum products, gas and petrochemical products
- Export of key equipment or technology for the oil, gas and petrochemical sectors
- Investment in the oil, gas and petrochemical sectors
- Investment, including participation in joint ventures, goods, services, information, technology and technical expertise and support for Iran's oil, gas and petrochemical sectors
- Purchase, acquisition, sale, transportation or marketing of petroleum, petrochemical products and natural gas from Iran
- Underwriting services, insurance, or reinsurance
- Efforts to reduce Iran’s crude oil sales
- Export, sale or provision of refined petroleum products and petrochemical products to Iran
- Transactions with Iran's energy sector
- Transactions with Iran’s shipping and shipbuilding sectors and port operators
Iran to optimize engine rooms to economize 13 mcm/d of gas
Iran planned to fund $2 billion to optimize 600,000 engine rooms by March 2017.
Nosratollah Seyfi CEO of Iran Fuel Conservation Company said on July 19th that by optimizing these engine rooms some 13 million cubic meters per day (mcm/d) of gas would be economized.
Earlier this week, his deputy Sasan Kazemijejad announced that some 30,000 engine rooms would be optimized by the end of current fiscal year (March 2016).
He said that the current engine rooms waste 50 percent of energy they receive.
Iran needs to invest $200 billion to optimize energy consumer sectors to halve the energy intensity. Iran with less than $400 billion GDP, consumes above 2 billion barrels of oil equivalent energy annually.
Natural gas shares about 70 percent of Iran’s total primary energy consumption.
According to the International Energy Agency, the energy intensity index in Iran is one of the highest in the world (twice as much as the world average) and has been increasing on average by about 3.4 percent per year over the past 40 years.
60 German companies kick-off Iran visit
A delegation from 60 German companies, headed by Vice Chancellor Sigmar Gabriel, who serves also as Economy Minister, started visiting Iran to discuss industrial cooperation, including energy-related sphere.
The list of German companies who are visiting Tehran hasn’t be published completely yet, but according to Iranian officials, Siemens and Linde are among them.
Before, Iran’s Oil Minister Bijan Namdar Zanganeh met with Linde, Lurgi and Siemens companies’ heads during his visit to this country in May to encourage them to involve in Iran’s LNG projects.
Iran planned to resume development of “Iran LNG” project with 10-million ton per year production capacity with Linde AG.
Iran is also keen to attract Siemens in mini LNG projects with capacity of producing 100,000 to 400,000 tons per annum of LNG to use inside the country in the remote regions.
Iran produces 11.5 Mt of petrochemicals in 2Q15
Iran produced 11.5 million tons of petrochemicals during first three month of current fiscal year, corresponding to the second quarter of 2015, Shana reported on July 14th.
Iran’s petrochemical products export increased by 11.59 percent in value during this period, the Custom Administration reported.
According to the report, the petrochemical products export reached 6.263 million tons with worth $3.623. The volume of petrochemicals export also increased by 24.54 percent.
Iran planned to produce 51 million tons of petrochemicals during current fiscal year, about 6 million tons more than last year.
Iran’s petrochemical production capacity is about 60 million tons, but the real output is less than this figure due to gas shortage and marketing problems.
Iran signs agreement to develop 6th cross-country gas pipeline
Iranian Gas Engineering and Development Company sealed a $2.3 billion worth BOT contract with Pasargad Energy Development Company to develop 590-km length 6th cross-country pipeline, aimed to transit the South Pars’ gas to western regions and Iraq (Baghdad).
The agreement also includes installation of five gas compressor stations.
Iran has an agreement with Iraq to deliver 25 mcm/d of gas to Baghdad via 6th cross-country pipeline, which 620 km of that has been completed inside Iran so far.
Total keen in Iran’s LNG sector
Total’s chief executive Patrick Pouyanné has said that his company seeks liquefied natural gas (LNG) and oil projects in Iran.
"We are looking at both gas and oil. When we had to leave Iran in 2006, we were actively working at an LNG project at South Pars (field) [in southern Iran]. So, first of all, we are closely looking at LNG projects," Kommersant quoted on July 19 Pouyanné as saying.
Works on Iran-Pakistan pipeline to begin in September
Pakistan's Minister of Petroleum and Natural Resources Shahid Khaqan Abbasi said on July 15th that Islamabad is hopeful to revive the stalled project, which is expected to deliver Iranian gas to the energy-starved country.
Work on Iran-Pakistan pipeline will begin in September. Pakistan had to lay down pipeline 700 KM, which may take over two years.
The joint project was launched in 2010 and aims to construct 1,800 kilometers (over 1,100 miles) of pipeline from Iran to Pakistan. Iran announced the completion of its part of the project in 2013, but Pakistan suspended the work allegedly due to sanctions imposed by the West.
Azerbaijan
Azerbaijan permitted Russia to supply gas to methanol plant
After a month Russian Gazprom announced that it is preparing to export gas to Azerbaijan, Baku confirmed on July 15th that AzMeCo methanol company will received Russian gas and the country has already permitted Gazprom to start gas supply.
According to his statement, Gazprom is ready to export 1 bcm to 1.2 bcm of gas to Azerbaijan by the end of 2015.
Azerbaijan increased gas export by 7%
Azerbaijan’s gas export increased by almost 7 percent in the first half of 2015, despite the country having stopped gas deliveries to Russia during the current year.
According to the State Customs Committee of the Republic of Azerbaijan’s new report, the country exported about 4.548 billion cubic meters (bcm) of gas during six months of 2015, which indicates 6.8 percent increase year-to-year.
Statoil to sell its shares in TANAP
Norway's Statoil is to leave Trans Adriatic Pipeline project (TAP) by selling its shareholding.
The news was delivered by Rovnag Abdullayev, President of the State Oil Company of Azerbaijan Republic (SOCAR) during an exclusive interview to Azeri ANS TV.
Turkish company to provide TANAP with gas turbines
Turkish GE Petrol&Gaz company will provide TANAP with gas turbines, Anadolu agency reported on July 17th.
TANAP’s initial capacity is expected to reach 16 bcm/a of which around 6 bcm will be delivered to Turkey in 2018 and the rest of the volume to Europe in 2020.
TANAP’s shareholders list will be SOCAR – 58 percent, Botas – 30 percent and BP – 12 percent.
Kazakhstan
Ukraine wants to buy Kazakh and Turkmen gas
Ukraine has once again raised the question of buying gas from Kazakhstan, Tengrinews reported on July 17th.
Head of the European integration department at the Ukrainian Energy and Coal Industry Ministry Mykhailo Bno-Airiyan said that Ukraine was interested in buying gas from Kazakhstan and Turkmenistan.
He said that we are ready to buy gas from Central Asia, there are transit issues, but we have to work it out.
Turkmenistan, Japan to discuss energy projects
Turkmenistan’s government delegation led by Baimurad Hodzhamuhammedov, the country’s Deputy Prime Minister in charge of fuel and energy complex, will be on a visit to Tokyo, Japan, Trend cited the message from Turkmenistan’s Ministry of Oil and Gas Industry and Mineral Resources.
Japan is interested in developing the cooperation with rapidly developing Turkmenistan which shows sustainable economic growth and is rich of natural resources, Daishiro Yamagiwa, Japan's state minister of economy, trade and industry said during the business forum in Ashgabat in early July.
The agenda of the business forum included the issues related to the practical implementation of the previously reached agreements, in particular, the construction of a modern gas chemical complex for production of polyethylene and polypropylene in the Kiyanly village and construction of the plant for production of gasoline and natural gas in Ovadandepe, Ahal province.