Iran preparing for winter gas challenge

Iran preparing for winter gas challenge

Baku, Azerbaijan, Oct. 22

By Dalga Khatinoglu - Trend:

Despite a 32-percent increase in gas delivery to power plants in warm seasons, Iran expects this figure to decline by 3.5 times in fall and winter due to projected soar in housing gas consumption.

Iran's natural gas consumption in housing sector soared to 220 million cubic meters per day (mcmpd) during last week, 30 mcmpd more than the previous week due to reaching cold season and declining the air temperatures by 15 degrees.

Iran's gas consumption level in winter is expected to surpass 450 mcmpd. Last winter, during some weeks, Iran's housing gas consumption reached about 500 mcmpd, which led to cutting gas delivery to power plants, petrochemical units, gas injection to old oil fields and industrial sector, due to gas shortage.

In addition to cutting gas supplies to power plants, which led to burning $30 billion of liquid fuels, the Iranian government had to decrease gas delivery to petrochemical plants from 35 mcmpd in summer to 15 mcmpd in winter. This caused a drop in the petrochemical production by 7.5 million tons during the last fiscal year (starts on march 21).

On the other hand, Iran cut gas supply to CNG production plants from 19 mcmpd to zero during the winter, which caused gasoline consumption to soar to about 70 million liters per day in average during last fiscal year.

During last year, Iran delivered 36 billion cubic meters of gas in to power plants, however a huge amount of this figure accounted for the warm seasons.

Now, the managing director of National Iranian Gas Company (NIGC) Hamid Reza Araqi said that during first half of current fiscal year (Iran's fiscal year starts on march 21, simultaneously with beginning of spring), some 33 bcm (about 180 mcmpd) of gas was delivered to power plants, 7.7 bcm more than the same period last year.

He told Shana news agency on Oct.21 that supplying 50 mcmpd of gas to power plant sector in winter has been scheduled and it's projected that some 42 bcm of gas will be delivered to this sector in the current year Iranian year.

Iran had to use about 28 billion liters of liquid fuels in power plants last year due to gas shortage, but Araqi says that Iran saved $5 billion during H1 of the current year due to decreasing liquid fuel delivery to power plants.

Iran's energy consumption increases about 3.5 percent annually, but the share of gas in total energy consumption is huge and its growth is more intensive than other energy carriers.

Below are the statistics for Iran's energy consumption during the last three decades, as published in the National Iranian Oil Refining and Distribution Company's (NIORDC) annual reports:

Below is Iran's fossil energy carriers consumption per day according to the data derived from NIORDC's annual reports. (Iran's fiscal year begins on March 21)

Fiscal year

Total daily energy consumption

Kbbl of Oil equivalent (OE)

Daily gas consumption

Kbbl of OE

Daily liquid fuels

Kbbl of OE*

1979-80

565

63

479

1989/90

1062

248

779

1999-2000

2084

1025

995

2004-2005

2931

1689

1174

2009-2010

3918

2504

1332

2010-2011

4027

2673

1274

2011-2012

4070

2707

1290

2012-2013

4120

2688

1362

** including gasoline, oil-gas, kerosene and fuel oil

The huge rise in gas consumption in housing sector since 1990's has led to decreasing the share of natural gas supplied to power plants.

Share of each fuel supplied to thermal power plants during lat decade, extracted from NIORDC's annual reports:

Iranian fiscal year

Gas consumption

Oil-gas consumption

Fuel oil consumption

2002/2003

81%

3%

16%

2003/2004

79%

5%

16%

2004/2005

78%

6%

17%

2005/2006

72%

10%

19%

2007/2008

71%

9%

20%

2008/2009

74%

8%

18%

2009/2010

72%

9%

19%

2010/2011

73%

10%

17%

2011/2012

61%

16%

23%

2012/2013

61%

12%

26%

2013/2014

56%

16%

28%

Gas production

Iran increased gas production by 12.5 mcmpd during last winter by implementing early gas production in phase 12 of South Pars field. The country then increased gas output of this phase to 25 mcmpd in July and Iranian government announced that this figure would reach 65 mcmpd by next winter.

On the other hand, Iran has also tested the platforms of phases 15 and 18 and scheduled to produce above 20 mcmpd of gas from these phases until winter. In that case, Iran would have at least 75 mcmpd of gas more, compare to last year, if the projected plans are realized without problems.

It seems Iran would overcome the gas shortage in the industry, petrochemical and auto sector, but it is still far from a level that would meet its natural gas demands in all the spheres.

For instance, Iran's power plants have about 200 mcmpd of gas consumption capacity, but delivering 115 mcmpd of gas (42 bcm annually), which is 42 percent less than that capacity.

On the other hand, above 80 percent of Iran's oil fields are in their second half-life and need above 180 mcmpd of gas to be injected in them to prevent the drop of oil output. Iran however only injects 85-90 mcmpd of gas into these fields.

Dalga Khatinoglu is a specialist on Iran's energy sector and head of Trend Agency's Iran News Service

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