How gas shortage damages Iran’s oil products export?

How gas shortage damages Iran’s oil products export?

Baku, Azerbaijan, May 31

By Dalga Khatinoglu – Trend:

Iran had planned to export 400,000 barrels of oil products a day during last year, but unanticipated gas export stop by Turkmenistan, unpredicted gas output disruption at the South Pars field, as well as soaring gas demand in the housing sector in winter led to the oil products export decrease to 290,000 b/d or about 57 million liters per day (ml/d).

The reason – unexpected gas shortage in the country, which led to rising liquid fuels consumption in power plants and the housing sector.

During some weeks of winter, the north of Iran faced with gas outrage.

Iran’s gas consumption in winter triples, compared to autumn. Iran had planned to deliver 65 billion cubic meters of gas to power plants during the last fiscal year (ended March 21), but it only supplied 61.5 bcm due to gas shortage in the housing sector, which reached 500 mcm/d in winter.

Turkmenistan also cut 30 mcm/d gas export to Iran in January 1, 2017 due to Islamic Republic’s long-delayed $2 billion worth of debts.

Iran had to stop gas oil export in February to supply power plants with fuel. The fuel oil export also indicates a huge drop in late fall and winter.

Iran’s last fiscal year

LPG export

Fuel oil export

Gas oil export

1st month

1.095

32.806

7.675

2nd month

1.16

40.622

16.121

3rd month

1.925

49.253

13.014

4th month

1.319

55.593

12.217

5th month

0.7

56.195

13.029

6th month

0.45

52.887

13.358

7th month

0

57.116

14.843

8th month

0.3

45.811

12.218

9th month

0

34.148

16.25

10th month

0

48.308

9.65

11th month

0.1

35.311

0

12th month

0

36

7.3

Average

0.587417

45.3375

11.30625

· *Based on official statistics from Iran (ml/d)

For the current year, Iran plans to double liquid fuel export, owing to supplying more gas to power plants. However, the figure doesn’t seem achievable. It may increase the figure to 420-450 thousand b/d.

During the first two months of the current fiscal year, Iran increased gas supply to power plants by 18.1 percent to 10.125 bcm. Gas oil and fuel oil consumption in this sector also decreased by 16.8 percent and 77.1 percent to 114 million and 105 million liters. It means more room for liquid fuel exports.

Decreasing liquid fuels consumption in the first two months of current fiscal year (March 21-May 21) came, while Iran has added 2.4 gigawatts to nominal power generation capacity, which now stands at 76.837 GW.

During the last fiscal year, Iran added 25 bcm to gross gas output and increased the figure to 285 bcm. For the current year, Iran also plans to increase the figure at least as much as last fiscal year.

During the last four years, Iran decreased liquid fuel consumption in power sector from above 26 billion liters to 10.5 billion liters annually. In case if this goes on, the country’s gas oil and fuel oil usage in power sector can halve during the current fiscal year. It means adding further 25-26 ml/d or around 130,000 b/d of liquid fuel to export volume.

Of course, Iran also consumes 82.35 ml/d of gasoline in transport, industry and housing sector, which can decrease with more gas supply or enhancing the energy efficiency at these sectors.

---

Dalga Khatinoglu is the head of Trend Agency’s Iran news service, follow him on Twitter: @dalgakhatinoglu

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