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.

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.

Chinese companies to process Uzbek garlic for further export to US and European countries
Chinese companies to process Uzbek garlic for further export to US and European countries
Kazakhstan's import of Turkish cement up
Kazakhstan's import of Turkish cement up
Turkmengas opens tender for maintenance of gas turbine generators
Turkmengas opens tender for maintenance of gas turbine generators
Loading Bars
Latest
Chinese companies to process Uzbek garlic for further export to US and European countries
Turkey's export of grain, legumes to France declines
Iran reveals its COVID-19 data for November 29
Details of Iran’s trade turnover announced
EU aims to support Georgia in its efforts to reform electricity market
Azerbaijan confirms 4,170 new COVID-19 cases, 1,985 recoveries
5.5-magnitude quake hits Vanuatu
Azersu LLC announces tender for purchase of equipment for laboratory
Kazakhstan's import of Turkish cement up
Azerbaijan shows footage of Aghdam's Shahbuldag village (PHOTO/VIDEO)
Expenses on construction of enterprises in Iran’s Isfahan Province increases
Number of enterprises launched in Iran's Ilam Province shrinks
Turkmengas opens tender for maintenance of gas turbine generators
At least 30 police killed, over 20 wounded in suicide car bomb explosion in E. Afghanistan
Georgia reports 4 426 new coronavirus cases, 3 721 recoveries, 35 deaths
Over 5,500 patients recover from coronavirus in Moscow in the past day
Azerbaijan shows footage of liberated from occupation villages of Kalbajar region (PHOTO/VIDEO)
China increases import of Turkish cars
Employment in Iran's Alborz Province declines
The President of Turkmenistan receives representative of medical community of Germany
S. Korea reports 450 more COVID-19 cases, 33,824 in total
Azerbaijan's turnover on payment cards in 10M2020 up
Inter-Agency Coordination Council discusses enforcement of Covid restrictions
Azerbaijan has ample opportunities and potential for artificial intelligence dev't
Trump may announce plans for 2024 presidential race during Biden’s inauguration
826 more coronavirus cases recorded in Kazakhstan over 24 hours
France sees further fall in COVID-19 hospitalizations as lockdown exit starts
Turkey's Temsa makes 1st electric bus exports to Sweden
Iran registers monthly positive trade balance
Scottish dev’t agency eyes establishing co-op with companies in Uzbekistan’s Karakalpakstan
Croatian PM in self-quarantine after wife contracts COVID-19
UK records another 15,871 coronavirus cases with 479 deaths
Some 46,000 people gather in Paris to protest against security bill
Kazakhstan to modify large energy saving projects on railways
Severe fire danger for Australia as temperatures smash records
Dozens of Boko Haram militants killed in Nigeria airstrikes
Pope installs new cardinals, including first African-American
WHO reports new daily record high of over 747,000 COVID-19 cases
UK police arrest 155 in anti-lockdown protests in London
Assistant to Azerbaijani president posts footage from Tartar, Aghdam cities
UK, France sign new deal to stop illegal migration across Channel
Iran discloses electricity generation at Iran's Bandar Abbas TPP
Turkey reports 6,714 new COVID-19 cases, 487,912 in total
Zarif: Iran at forefront of fighting terrorism
Georgia takes necessary steps to avoid increase in bread prices
Ethiopian military has taken 'full control' of Tigray capital, government says
Iran’s Bahar Azadi gold coin price continues to fall
Weekly review of Azerbaijani precious metals market
Kazakhstan raises import of grain, legumes from Turkey
Buy/sell operations at Iran Mercantile Exchange revealed
AP publishes article covering Armenian missile attack on Azerbaijan’s Ganja on Oct.17 (PHOTO/VIDEO)
OIC adopts resolutions in connection with Armenia's aggression against Azerbaijan
President, members of Board of European Muslim Forum send letter to President Aliyev
Aghdam district of Azerbaijan after 27 years of Armenian occupation (VIDEO)
Kazakhstan to bring waste processing level to average European level
UK appoints minister in charge of COVID-19 vaccine rollout
Number of blocked malware in AzStateNet network drops
Airport in Uzbekistan to buy auto parts via tender
Iranian Energy Exchange announces products to be on sale November 29
Azerbaijani team takes third place in group exercises at 36th European Rhythmic Gymnastics Championships
At least 6 killed in Somali capital suicide bombing
Microsoft Azerbaijan to support all initiatives in liberated territories of Azerbaijan
Azerbaijan shows footage of Kalbajar's Vang village (VIDEO)
Police fire tear gas at Paris protest against police violence
Electricity imports growing in Georgia
Cargo, passenger traffic via Turkish Sabiha Gokcen Airport slumps amid pandemic
Uzbek-Korean JSC Uz-Dong Won Co. announces tender for steel pipes supply
Cargo transportation at Turkish Antalya airport reduces
Austria records nearly 1,000 COVID-19 deaths over past 10 days
State Employment Agency of Azerbaijan opens tender on supporting start-up projects
Results of Azerbaijan's junior national team performance at 36th European Rhythmic Gymnastics Championships announced
Details of Iran’s exports to Iraq declared
Azerbaijan reports 4,212 new COVID-19 cases, 1,760 recoveries
Four citizens dead as result of mine exploding in Fuzuli - Azerbaijani Prosecutor General's Office
Kazakhstan's export volumes to China surge despite COVID-19
Assistant to Azerbaijan's president, diplomats, Garabagh FC representatives visit Aghdam Mosque (PHOTO)
Turkmenistan committed to promoting socio-economic development of Afghanistan
Georgian oil companies seek to avoid price increases
Tender for maintenance of elevators, escalators launched in Turkey
Azerbaijan's ten-month output of oil products declines
Turkey's export of grain and legumes to Turkmenistan up
Turkmenistan, Belarus discuss program of cooperation
Iran reveals its COVID-19 data for November 28
Azerbaijani president's assistant, diplomatic corps reps arrive at liberated Aghdam city
Rural digitalization project successfully underway in Kazakhstan
Missile fired to Tartar by Armenia delivered to local museum - president's assistant (VIDEO)
Number of enterprises put into operation in Iran's Ardabil Province up
Water problems center to be created in Uzbekistan’s Khorezm region
Khazar Consortium opens tender for purchase of lubricating oil
Azerbaijan’s Baku Telephone Communications opens tender
Georgia sees increase in COVID-19 cases
Number of shells fired at Tartar district by Armenian Armed Forces revealed
German minister says partial lockdown could last until Spring 2021
Kazakhstan doubles export to Afghanistan
Price of apartments in Iran’s Tehran rising
Autumn grain sowing carried out on large area of land in Azerbaijan
Azerbaijan’s Baku Metro to buy inert materials through tender
Weekly review of Azerbaijani currency market
Azerbaijani president's assistant, diplomatic missions visiting Tartar (PHOTO)
Turkish soldiers to soon begin their missions in Azerbaijan - Turkey’s VP
All news