Iran Eyes Exports of 68bn m³/yr

Iran's top gas officials have outlined the country's plans to export gas, all of it going by pipeline and mostly to its neighbours for the next five years and reaching 68bn m³/yr by that time. The director of National Iranian Gas Company for international affairs, Azizollah Ramazani, said July 25 that Iran will start exporting gas to Iraq in August.

Ramezani added that Iran’s gas trade balance was positive as it exported 2.5bn m³ and imported 1.9bn m³ of gas in the first four months of the current Iranian fiscal year, which started on March 20. Iran exported 8.4bn m³ but imported 9bn m³ in 2015.

Iran has agreed to export 25mn m³/d of gas to Baghdad. In the first stage, Iran will export 5mn m³/d of gas, then the figure would increase gradually. The two countries have also made another agreement, based on which Iran is allowed to export 25mn m³/d of gas to Basra, but the related pipeline has not been built.

He referred to the projects for exporting gas over the sixth development plan, which ends in 2021, saying that 68–80bn m³/yr will be exported, of which 50bn m³/yr will go to neighbouring countries. He said there was also potentially about 30bn m³/yr gas export capacity for the European Union.

"Currently, 10 out of 15 neighbouring countries have the capacity to import Iranian gas and sending gas to India and China is on the agenda. Meanwhile, exporting gas to Japan and South Korea is being studied which will be possible after completing the LNG project."

Iran has contracts and MoUs with Iraq, Turkey, Pakistan and Oman to export about 126mn m³/d (46bn m³/yr) in the coming years. For now, Iran's sole gas client is Turkey. There is also spare capacity in Oman's LNG export facility.

Iran produces 735mn m³/d of raw gas, of which 35mn m³/d are flared and 90mn m³/d injected into oil wells to maintain oil production. Methane accounts for 97% of the Iranian gas output, while ethane, propane, and butane constitute the rest.

Meanwhile, the managing director of National Iranian Gas Company, Hamid Reza Araqi, said on June 25 that some 700mn m³/d of gas are consumed in total by all the different sectors and this figure will reach 1.2bn m³/d by the end of the sixth development plan.

Plans to cut waste could allow gas exports to rise by 120mn m³/d, he said. Iran plans to spend $16bn over the next 10 years in energy efficiency projects with the aim of saving $160bn. For the time being, energy intensity rate in Iran is much higher than the global average.

According to official statistics, Iran’s energy demand last year was equale to 2bn barrels of crude oil equivalent. Natural gas accounted for 70% of that. Based on a World Bank report, Iran’s GDP was around $397.7bn last year.

Araqi touched on the outlook for gas production and export in the sixth development plan, saying that the country’s annual gas output should hit 385bn m³/yr (100bn m³/yr more than the current level), of which annually 100bn m³/yr would be allocated to residential, commercial, and minor industrial units, 85bn m³ to power plants, and at least 68bn m³ will be exported.

Referring to gas export pipelines, Araqi said 36,000 km of pipelines are operational across the country and the gas pipeline network should be extended by 10,000 km by the end of the sixth development plan, based on which the sixth cross country pipeline extending from Assalouyeh to Ahvaz is on the agenda.

Dalga Khatinoglu is NGE's expert on Iran's energy sector and head of Trend Agency's Iran news service