Iran says gas transit from Caspian Sea to Persian Gulf not economic

Business Materials 21 November 2015 17:40 (UTC +04:00)

Baku, Azerbaijan, Nov. 21

By Umid Niayesh- Trend:

Gas transit from the Caspian Sea littoral states to Persian Gulf is not economically justified, Iran's oil minister, Bijan Namdar Zanganeh said.

He made the remarks while responding a question about Iran's gas talks with Turkmenistan, Mehr news agency reported Nov. 21.

Iran's negotiations with Turkmenistan mainly focused on natural gas swap, Zanganeh said.

The Iranian minister further referred to Iran-Oman negotiations on gas export, saying Iran's gas export to Oman will start once sanctions are lifted.

Zanganeh noted that the idle capacity of Oman's LNG producing units is about one million tons per year.

Earlier it was planed that Iran will export its gas to Oman via Qatar, however with the increasing possibility of the sanction removal, direct export plan was brought to the agenda.

While responding a question about Iran's gas exports to the EU, he said Iran's current plan is based on exporting LNG to European markets.

Iran has a LNG plant, developed by 50 percent with 10.5 million tons (or above 14 billion cubic meters natural gas) of production capacity annually, which is expected to become operational by 2019.

Once the plant is completed, Iran will enter to the European gas market, Zanganeh said.

Earlier, Alireza Kameili, head of the National Iranian Gas Company, said that Tehran is in talks with the largest floating LNG company for production of liquefied natural gas, without revealing the name of the company.

"Due to their high economic viability, Iran is moving in the direction of building FLNG plants," Kameli said.

The official made it clear that several LNG mega-projects, currently halted due to international sanctions, are still on track. "LNG projects are being pursued as before and FLNG is an alternative option."

Iran had earlier contracts with Anglo-Dutch Royal Dutch Shell, Spain's Repsol and France's Total, to build three LNG plants, but those companies abandoned the projects in 2010 due to international sanctions.

Tehran sees LNG as becoming more viable than piped gas, which requires a great deal of time and high costs to reach Europe.

Further, the country plans to build the capacity to export 40 million tons a year of LNG, which is super-cooled to minus 162 degrees Celsius for shipment by special tankers.