14 consortia ready to invest in Iran-Iraq gas pipeline

Baku, Azerbaijan, Feb. 13

By Khalid Kazimov - Trend:

Iranian Deputy Oil Minister in Gas Affairs Hamid Reza Araqi has said that so far 14 Iranian consortia have announced readiness to fund the country's gas pipeline to neighbor Iraq, Iranian Oil Ministry's Public Relations reported on Feb. 13.

By April the necessary groundwork for exporting gas to Iraq will have been accomplished, he said.

He further noted that the Iranian National Gas Company will consider as eligible for the project only consortia that could provide documents on $1.5 billion that they could invest in the project.

"These companies can start the project with a $500-million fund and will be required to carry out their obligation in two years," Araqi explained.

A tender is going to be held for the project financed in the BOT (build-operate-transfer) fashion in the near future, the Oil Ministry's report adds.

With 12 percent growth in gas production levels during 2014 and the same projected volume for 2015, Iran is testing the water to choose its gas export routes based on priorities.

The country produces 660 million cubic meters per day (mcm/d) of enriched gas and the volume is expected to increase by 100 mcm/d by March 2016.

Iran has five major cross-country pipeline projects, of which four -worth $13.7 billion- are aimed towards gas export to Pakistan, Iraq, Turkey and Oman.

Iraq needs Iranian gas to use in its power plants. The country's gas reserves are about 3.6 trillion cubic meters, about 10 times less than Iran. About three-fourths of Iraq's natural gas reserves are associated with oil. Currently Iraq produces only 0.6 bcm/a of refined gas.

Iraqi gross natural gas production was about 20 bcm in 2012, of which 12 bcm (58 percent) was vented and flared. Natural gas that is not flared is mostly used for re-injection into oil wells to increase oil recovery rates.

Edited by CN