Iran to Take Shortcut to EU with FLNG

Iran is looking at overcoming the obstacles in the way of piping gas to Europe by means of quick-to-build floating LNG facilities. The deputy head of National Iranian Oil Company (NIOC) for investment and finance Ali Kardor announced on April 6 that a Norwegian company was in talks with NIOC to dispatch small floating liquefied natural gas (FLNG) vessels to Persian Gulf.

He did not reveal the name of the company, but an Iranian industry source told NGE that Norway’s Golar LNG, which owns one of the largest FLNG fleets in the world, is negotiating both dispatching its own FLNG vessels to Iran and building new ones for the country.

Golar declined to comment as of preparing this report. In late February, CEO Gary Smith said the company hoped to sign heads of terms around the middle of this year on a new project in west Africa, followed by one in the Middle East although he declined to confirm it would be Iran.

FLNG ships take natural gas offshore and the gas is chilled to -162°C, shrinking in volume 600 times, and then is transported to markets.

According to Kardor, associated gas from the Persian Gulf offshore oil fields, including Forouzan field (shared with Saudi Arabia), will be liquefied and transported by FLNG vessels.

He also said that foreign companies had put in requests for changing sweet gas into LNG offshore, adding, “Due to the reduction of prices of FLNG projects, such projects are highly welcomed in the international market.”

This project is within the category of small FLNG projects, he noted.

The managing director of National Iranian Gas Export Co Alireza Kameli told Wall Street Journal January 26 that Iran was in talks with Golar LNG to build floating LNG facilities so Iran could supply the EU in under two years from the date of an agreement.

European LNG net imports grew by 10.2% in 2015 to 37mn mt after three years of continuous decline, but remained far below the peak level of above 65mn mt reached in 2010 and 2011.

Iran desk