Iran: EU oversupplied, short-term gas export unprofitable (Exclusive)

Tehran, Iran, May 24

By Mehdi Sepahvand, Dalga Khatinoglu – Trend:

The EU’s gas market is now oversupplied and exporting Iranian gas to this market is not profitable now either through a pipeline or as LNG, Deputy Oil Minister for International Affairs and Commerce Amir Hossein Zamaninia told Trend May 24.

According to him, regional markets are in Iran’s focus currently.

“We should sell gas to global markets, but at this time Iran is not in this situation yet,” said Zamaninia. “As holder of the world’s largest gas reserves, Iran needs to develop gas production projects further.”

“Recently, Iran and Azerbaijan’s SOCAR have agreed on cooperation in development of Iran’s upstream sector. Dozens of foreign companies have been qualified to enter Iran’s upstream sector,” he added.

Twenty-nine foreign companies have been qualified by NIOC to take part in Iran’s upstream oil and gas projects and the list is to be expanded.

He added that currently Iran can and is working on exporting gas to neighbour states, but there is little gas for exporting to far markets and this is not profitable via pipelines through Azerbaijan, Turkey or other routes.

“Economically it is not viable. We plan to involve in European and other markets and export gas through pipeline or as LNG in future.”

According to Iran’s five-year national plan, it should increase the gas export to 60 billion cubic meters per year (bcm/yr) by 2022. Currently, Iran has agreements with Iraq and Oman to supply 28 bcm/yr of gas to these countries.

Iran’s gross gas output reached 285 bcm last fiscal year (ended March 20), but it plans to increase this volume to above 400 bcm/yr by 2022.

Zamaninia said that currently the EU markets are oversupplied with gas and the gas price is low, and it is not profitable for Iran to enter these markets in short term.

EC: Iran could be important contributor to European gas supply diversification efforts

Charles Ellinas, CEO of the Cyprus-based energy consultancy e-CNHC, told Trend May 23 that gas prices in Europe are too low to make gas export prospects for Iran commercially viable.

Ellinas, who is also a non-resident senior fellow with the Atlantic Council and has over 35 years of experience in the oil and gas sector, added that right now gas prices in Europe are under $5/British Thermal Unit (mmBTU) and are forecast to remain in the range between of $5/mmBTU and $6/mmBTU in the long term.

Meanwhile, the price of Iranian gas supplied to Turkey was $5.8/mmBTU in 2016, Ellinas said.

“At such price by the time it reaches Europe it will be over $7/mmBTU, which would be too high to attract buyers,” the analyst said.

Iran should firstly construct a 1,800-km pipeline (Igat9) with 17 compressors and raise at least $6-8 billion worth of investment to connect the South Pars field to its north-western regions to be able to export gas to the EU through the Southern Gas Corridor, or a new pipeline.

Coming to exporting LNG, Iran has an LNG project, half done, with 10.4 million tons per year capacity, but it needs at least $6-9 billion of investment to become operational.

Gas consumption in the EU increased by 7 percent in 2016 compared with the previous year to 447 bcm, of which a third was supplied by Russian giant Gazprom.

Subscribe to Trend in Google News! Subscribe
Wild winds in Turkey claim lives, close Bosphorus strait
Wild winds in Turkey claim lives, close Bosphorus strait
Issue of building railway, highway along Araz River resolved – Turkish President
Issue of building railway, highway along Araz River resolved – Turkish President
Ankara is ready to take steps to normalize ties with Israel – Turkish President
Ankara is ready to take steps to normalize ties with Israel – Turkish President
Loading Bars
Latest
Number of flights via Iran’s Tabriz International Airport up
Georgia releases COVID-19 data for November 30
Vice admiral R Hari Kumar to take over as new chief of Naval staff today
JP Morgan expects Azerbaijan’s oil output to fall in 2023
CEO of European Azerbaijan School explains goals of hosting first IB conference (PHOTO/VIDEO)
Azerbaijan shows footage from Kalbajar's liberated Gilinjli village (VIDEO)
Azerbaijani oil prices increase
Azerbaijan sees growth in real estate registration rate for 10M2021 (Exclusive)
Iranian currency rates for November 30
Azerbaijan approves procedure for providing COVID-19 certificate
Uzbekistan shares updated COVID-19 data
Georgia shares data on TOP-5 potato export destinations for 10M2021
Kazakhstan’s Kazinform joins Turkic World media platform (PHOTO)
JP Morgan reveals forecasts for Azerbaijan’s 2021 oil output
Oil gains on bets OPEC+ will pause output hike
Azerbaijan approves amendments to law on vocational education
Azerbaijan may give incentives to support taxpayers offering local transport and forwarding services
Pakistan, Iran discuss establishment of barter system
Baku-Supsa loaded 1000th tanker at Supsa terminal on the Black Sea
Australian scientists establish platform to combine human, machine intelligence
Iran oil ministry requires more share from revenues - Energy Commission
Oil prices rise on bets OPEC+ will hold off output hike
654 more COVID-19 cases reported in Kazakhstan
Israel discovers 1,900-year-old industry building, large cemetery
Global coalition seizes 145.3 tonnes of cocaine - Colombia's navy
Snowfalls, heavy rains and strong winds hit Italy and Spain
Eight Iraqi officers probing attack on PM arrested on charges of negligence
Biden urges calm over Omicron COVID-19 variant
Germany's SPD will announce its ministers next week
Messi wins The 2021 Ballon d'Or
Georgia’s electricity exports double
Wild winds in Turkey claim lives, close Bosphorus strait
Azerbaijan represented at III Pacific Alliance International Cooperation Forum
Iran top nuclear negotiator, Mora meet ahead of Vienna talks
Uzbekistan, Kyrgyzstan discuss creation of trade-logistics complexes in border areas
Twitter CEO Jack Dorsey to step down
Georgian delegation leaves for Brussels
Azerbaijani, Saudi Arabian foreign ministries hold consultations
Famous artist receives Azerbaijani citizenship
Azerbaijan holds expanded meeting of Operational Headquarters for Combating COVID-19 (PHOTO)
Azerbaijan approves COVID-19 certificates
Azerbaijan discloses state budget revenues through State Customs Committee
Volume of loans issued in Azerbaijan’s real estate sector increases
Price indexes of industrial, construction sectors at Uzbek stock exchange fall
Kazakhstan to build hybrid solar power station
Azerbaijan's foreign trade turnover increases in 10M2021
Some CSTO members’ congratulations to Azerbaijan show Armenia's insignificance in CSTO - analyst
Interest rates on consumer loans in Georgia increase
Uzbekistan starts construction of new branch of Gazli-Kagan gas pipeline
Kazakhstan eyes increasing container shipments
SOCAR projects increase in local manufacturing of fuel products from 2023
IRENEX shares data on sales of Bandar Imam Petrochemical Company
Turkmen Ministry of Textile extends tender for modernization of cotton-spinning factory
Snam to increase spending on energy transition activities
Iran eyes decrease in passenger transportation via Bandar Abbas International Airport
Turkmenistan becomes Uzbekistan’s second largest gasoline supplier
Azerbaijan adopts new state standard on farming activities
Azerbaijan Deposit Insurance Fund reveals number of loans of liquidated banks
Uzbek Statistics Committee shares data on import of cement
Azerbaijan rapidly continues construction of Barda-Aghdam highway (PHOTO)
Iran discloses details of its daily gasoline production
Snam reveals investment plans by 2024
Snam expects to achieve sustainable growth of main indicators in 2021-2025
Snam raises methane emissions reduction target
Azerbaijan’s economy minister talks projects submitted for country's industrial parks
New deputy ministers of Youth and Sports of Azerbaijan appointed
Georgia’s Partnership Fund to be renovated – minister
Iran resuming exports to Tajikistan through Turkmenistan's routes
SOCAR returns part of loans through its activities in Turkey
Issue of building railway, highway along Araz River resolved – Turkish President
Ankara is ready to take steps to normalize ties with Israel – Turkish President
Azerbaijan confirms 857 more COVID-19 cases, 1,091 recoveries
Iran’s Bahar Azadi gold coin price skyrockets
Azerbaijan shares data on number of vaccinated citizens
Number of Turkish citizens seeking jobs in Uzbekistan greatly increases
EV maker Phoenix Motors files for U.S. IPO
Turkmenistan pays special attention to boosting transport, transit communications - president
Kazakhstan's KMG Engineering to buy batteries via tender
Gulf bourses regain some ground after Omicron battering
Iran shares data on generation of Shahid Rajaee TPP
ADB to finance export projects of Turkmen SMEs
Data on new Omicron coronavirus strain analyzed by crisis center - Kremlin
Georgia sees increase in persimmon exports
Kazakhstan’s oil-producing company opens tender for equipment repair services
Portugal finds 13 cases of Omicron variant at Lisbon soccer club
Turkmenistan ready to provide its port facilities in Caspian Sea for ECO countries
Cargo transportation via Iran’s Ahvaz International Airport climbs
Israel's Partner Communications swings to Q3 profit
Foreign assets of Azerbaijan’s commercial banks increase in 10M2021
Civilian injured in mine explosion in Azerbaijan's Jabrayil district
Georgia expects slower monetary policy normalization pace – TBC Capital
SOCAR to optimize fuel production at Baku refinery based on international standards
Iran reveals COVID-19 data for November 29
Turkey reveals volume of cargo transshipped via its local ports in 10M2021
SOCAR expects progress on Heydar Aliyev Baku Oil Refinery reconstruction project by late 2021
Mortar and artillery units of Azerbaijani army hold live-fire tactical exercises (VIDEO)
Kazakhstan-Turkmenistan bilateral trade up for 9M2021
Weekly review of Azerbaijani oil market
Iran membership in ECO expands regional economic ties
Azerbaijani Economy Minister talks land allocated for Aghdam Industrial Park
All news