Iranian oil ministry contracting private sector on electricity export

Business Materials 17 February 2015 18:09 (UTC +04:00)

Baku, Azerbaijan, Feb. 17

By Khalid Kazimov - Trend:

Iranian Oil Minister Bijan Namdar Zanganeh said that the ministry has signed 6 contracts to provide the private sector with gas to be used in production of export-bound electricity, SHANA news agency reported Feb. 17.

Zanganeh who was speaking to Iranian MPs at the parliament said that the contracts follow Iran's policies on "resistance economy" where provisions have been made for the Oil Ministry to diversify its forms of gas export.

Pointing out that neighbor countries lodge Iran's main gas and electricity markets he said that even if the price of gas is granted to be 13 cents (as proposed by the parliament Energy Commission), the price of gas given to domestic petrochemical facilities will still be 40 percent of that exported abroad, hence the gain in transforming gas into electricity and then exporting it.

Providing comments on the price of Iran's exported gas at 36 cents he said that the major part of the gas is used to produce electricity.

He added that Iran has already signed first contract on gas export to Iraq.

Based on the contracts, the Iranian Oil Ministry as the investing party will provide the private sector with gas to be consumed for the production of export-bound electricity.

Director General of the Public Relations of Iran's Oil Ministry Akbar Nematollahi in reaction to allegations that the ministry has been exporting electricity parallel to the country's Energy Ministry, said Feb. 15 that the exports have come only after they were agreed upon with the Ministry of Energy.

"There is some criticism that stems from lack of knowledge on the country's major policies," he said.

He said that since the Oil Ministry has made major plans for increasing its gas production, by the next Iranian calendar year (starting Mar. 21, 2015) the country will have surplus gas and it has to devise some ways to make optimal use of it.