Baku, Azerbaijan, Oct. 11
By Fatih Karimov – Trend:
Iran, the world’s biggest gas reserve holder (33.5 trillion cubic meters, 18 percent total), is still facing problems due to export problems.
Meanwhile the country has increased its gas output significantly and targets an output of 1 bcm/d by the end of the current fiscal year (March 20, 2018), it exported only about 8 bcm of natural gas, with Turkey being almost the only destination.
Iran prefers exporting liquefied natural gas (LNG) to distant markets including the EU, but no agreement has been reached so far for construction of the plants for the purpose.
The country’s solo LNG project, the 52-percent completed "Iran LNG" needs about $8-10 billion of investment to finalize and talks with foreign investors haven't yielded any results so far.
Last year, Ali Kardor, the managing director of National Iranian Oil Company, said that the country targeted exporting 0.5-2 million metric tons per year (MT/y) of LNG using mini-LNG plants and floating LNG vessels (FLNG) - Iran’s alternative projects to export LNG.
The country has signed memorandum of understandings (MoU) with South Korean Kogas over the development of LNG projects as well as with National Energy Administration of China over developing mini-LNG projects as of now.
But talks over purchasing or manufacturing floating liquefied natural gas vessels (FLNG) led to no results in past months.
Now, Kardor says that Iran's first deal for construction of a FLNG facility will be signed with a Norwegian company soon.
The 20-year deal is intended for production of 500,000 tons of LNG, Kardor said Oct. 10, adding that pricing formula of the products will be determined by the Iranian Oil Ministry.
He did not unveil the Norwegian firm’s name, but last year it was announced that Tehran is negotiating with Norwegian Golar and Hemla Vantage companies. Golar owns one of the largest FLNG fleets in the world, while Hemla Vantage was keen to lease a FLNG vessel from a Belgian company, Exmar, to collect and liquefy flaring gas in offshore fields around Kharg Island in the Persian Gulf (the amount of yearly collection and liquidation of flaring gas in Kharg Island can stand at 0.5 MT).
Launching FLNG and mini-LNG facilities will help Iran to diversify and expand its natural gas market, and take advantage of being the world’s largest natural gas holder.
These projects will also grant the country chance to use its flaring gas (mostly from burning associated gas in the oil sector) which currently amounted at about 11 billion cubic meters per year (bcm/y) by converting it into LNG.