How Iran’s unchanged gas output met 6 percent consumption growth?

Iran Materials 21 April 2013 17:35 (UTC +04:00)
How Iran’s unchanged gas output met 6 percent consumption growth?

Dalga Khatinoglu, Trend Iran news service head/

Mehdi Fakour, the managing director of Iran Central Oil Fields Company (NIOFC) said on April 19 that the company daily produced 264 million cubic meters of (gross) gas in the previous Iranian calendar year (which ended March 20), showing one million cubic meters daily increase compared to its preceding year.

Iran Central Oil Fields Company supervises all upstream activities in the central oil and gas regions of the country. With 43 gas fields and 25 oilfields it is considered the country's largest gas producer company.

Last week, the Mehr News Agency reported that South Pars gas field's gas production stood at 233 million cubic meters per day in the previous calendar year.

South Pars gas field, operated by Pars Oil and Gas Company, is now active with 10 phases. The giant gas field's output currently account's for 38 per cent of Iran's total gross natural gas production.

Based on official reports, South Pars gas field's output in the Iranian calendar year of 1390 (two years ago) was around 86 billion cubic meters, then this field's output had not changed during last year compared to its preceding year.

So the combined output of NIOFC and South Pars stood at 497 million cubic meters per day (181.5 cubic meters annually), which accounts for over 80 per cent of the country's total gross gas production.

The obvious fact is that Iran's two major gas producer companies managed to increase the country's gas output by only one million cubic meters per day in the past Iranian calendar year.

Production and domestic consumption

Based on the latest report released by U.S. Energy Information Administration (EIA), Iran's gross gas production stood at 224 billion cubic meters in 2012.

Some 67 per cent of the mentioned amount (153 billion cubic meters) was converted to dry gas (suitable for consumption in homes and industries), all of which consumed domestically.

Iran's domestic gas consumption reached 152.91 billion cubic meters in 2012, which is 6 per cent more than its preceding year. The amount is exactly equal to the country's gas output.

The reports says that in 2011, Iran reinjected about 28.3 billion cubic meters (or 77.5 million cubic meters per day) which accounted for 12.6 per cent of its total gross gas production, to oil wells in order to increase the old oil fields' recovery rate.

Iran faces continued depletion of its oil production capacity, as its fields have relatively high natural decline rates (8-13 percent), coupled with an already low recovery rate of around 20-30 percent, according to IEA report.

Iran announced that it has reinjected 100 million cubic meters of natural gas per day to its oilfields during last summer. Considering the surge in gas consumption to 580 million cubic meters during winter - which is more than Iran's total gas output - the country was unable to inject natural gas to oilfields in cold seasons.

The U.S. Energy Information Agency has reported that over 17 billion cubic meters of Iranian natural gas wasted annually through flaring.

Fars News Agency reported last May that some 41.5 million cubic meters of associated gas and 9.5 million cubic meters of low-density natural gas are flared and wasted on oilfields and gas refineries per day. Then the flared gas amount remained unchanged in 2012 compared to 2011.

Why flow of gas to household sector is not disconnected?

Natural gas meets 59 percent of Iran's total energy needs. Last solar year, Iran decreased gas imports from Turkmenistan by 60 percent to 4 billion cubic meters from 12 billion cubic meters compared to the year before. Meanwhile, exports of Iranian gas to Turkey remained nearly stable at 8.5 billion cubic meters.

Analyzing the released statistics about the stable exports, the falling decrease, and the 6 percent growth in gas consumption, just the two below mentioned factor can explain how the country did not face problem in supplying gas to the household sector:

The decrease in the injection of gas to oilfields

The replacement of gas with furnace oil in some hydroelectric power plants

National Iranian Gas Company managing director Javad Owji said in mid-2012 that 91 million cubic meters and 19 million cubic meters of natural gas are supplied on the average per day to industrial units and CNG stations, respectively.

Currently, 50,000 industrial units and 67 power plants are being supplied with natural gas. But, the household sector accounts for 75 to 80 percent of the country's total gas consumption.

According to the Mehr News Agency, Iran cut supply of gas to 50 thermal power plants last December due to a surge in gas consumption by the household sector. The power plants were fed with 94 million liters of diesel fuel and furnace oil, instead.

Iran delivers some 220 million cubic meters of gas to power plants per day during summer, but the delivery is decreased to 130 million cubic meters every year. However, Iran decreased supply of gas to its power plants to 35 million cubic meters per day in December 2012.

The decrease in gas injection to Iranian oilfields, which are mostly in the second half of life will reduce Iran's capability to increase oil production.

On the other hand, replacing gas with diesel fuel and furnace oil will intensify air pollution, the predicament which is facing many industrial and large cities in Iran.