Gas export goal in Iran's 6th Development Plan

Gas export goal in Iran's 6th Development Plan

Baku, Azerbaijan, Aug. 31

By Dalga Khatinoglu:

Iran has been revealing the details and aspects of the 6th Development Plan, a framework for a 5-year perspective of economic performance.

According to a report, released by Shana on Aug.30, quoting the CEO of National Iranian Gas Company (NIGC) Hamid-Reza Araqi, the country plans to increase gas export from the current 10 billion cubic meters per annum (bcm/d) to 66 bcm by March 2021.

Adding 56 bcm/d of gas to the export volume in five years seem a little ambitious, but regarding the development pace of South Pars and other new gas fields, the planned goal is quite possible.

Iran currently produces about 245 bcm/a of raw gas, of which about 180 bcm/d is refined.

Some 12 bcm/a of Iranian produced gas is flared, while about 34 bcm/a is re-injected into oil wells. Iran also delivers about 12.8 bcm/a of raw gas to petrochemical plants.

With full implementation of South Pars by 2018 or 2019 Iran's refined gas production capacity will increase by 110 bcm/a to 365 bcm/a.

Iran also plans to gather the flaring gas in coming years.

The country is also preparing to develop Kish gas field, the largest non-shared natural gas field in the country.. Iran allocated $1.4 billion in July to the develop Kish gas field, located in the Persian Gulf. The field is projected to yield 9 bcm/a of natural gas, with 1.8 trillion cubic meters of in-situ gas.

Iran also has about 45 new oil and gas projects to be offered to foreign countries in the coming months based on newly designed oil and gas contracts (Iran Petroleum Contract).

The country hasn't commenced any new major oil project since 2007, but there are several projects that would add a significant amount of associated gas to Iran's gas output in coming years. Currently, the associated gas shares about 30 percent of Iran's total gas output.

Iran ranks fourth globally in term of its 158 billion barrels of oil reserves, but first in terms of its 34 trillion cubic meters of gas reserves, which equals 240 billion barrels of oil equivalent.

Iran's gas consumption would increase in coming years. For instance

Iran is preparing to gasify 3 million new households and 19,000 industrial units by 2018.

Currently, over 19 million households and 73,000 industrial units reach natural gas fuel. These sectors share more than 70 percent of Iran's total refined gas consumption.

On the other hand, Iran plans to double petrochemical units' capacity by 2020.

The country's power sector also consumes about 50 bcm per annum (bcm/d) of refined gas, while some 20 bcm/a in gas is needed to curb burning liquid fuels (about 19.5 billion liters of diesel and fuel oil) there. The country's power generation growth pace is also very high.

About 80 percent of Iran's active oil fields are in their second half-life and Iran re-injects about 34 bcm/a of raw gas into these fields to slow the production decline pace, but this figure is not enough and Iran needs to double this figure as soon as possible.

However, if Iran commences the mentioned projects and also decreases the energy intensity inside the country, there is no doubt that Iran can increase gas export to 66 bcm/a by 2021.

Energy intensity in Iran is two times more than the global average, according to the World Bank's estimations. Iran consumes about 2 billion barrels of oil equivalent primary energy annually, while natural gas shares 72 percent in this volume.

Edited by CN

Dalga Khatinoglu is an expert on Iran's energy sector, head of Trend Agency's Iran news service. Follow him on @dalgakhatinoglu

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