Tehran: Gas export gives Iran bigger intl. influence: MP

Tehran Times, Iran

September 24, 2007

Gas export gives Iran bigger intl. influence: MP

TEHRAN (PIN) – Iran could play a more effective role
in the region and major parts of the world by
exporting gas to India and Europe, said a member of
parliament’s Plan and Budget Committee here Sunday.

Morteza Tamaddon told PIN, `We should not have a
unilateral view of gas export and think of only
economic interests as gas export to India and Europe
serves interests beyond economic profits, empowering
Iran in the region and world.’

He said the country now lacked enough capacity to
refine the whole volume of produced gas, adding the
country would have no alternative but export the
commodity until the refining capacity reached its
desirable level.

`If we stop exporting gas and derive gas from jointly
owned fields according to domestic refining capacity,
we will be outpaced and a part of resources will
fade,’ noted the lawmaker.

Caretaker of the Oil Ministry Gholamhossein Nozari
said Iran was pursuing the export of natural gas,
adding the policy was underlined in the directives of
the Supreme Leader of the Islamic Revolution.

He said the country held more than 15 percent of the
world’s gas reserves and it needed to have greater
share in the global gas market.

Nozari said some countries, which had less than two
percent of the world gas reserves, currently had a
seven percent share in the global market.

The comments clearly put to question certain domestic
objections to the policy of exporting gas. Some
analysts and Majlis deputies have criticized the
government’s policy to export gas, arguing that the
country needs gas for domestic use as well as for
injection into oilfields. Although the idea is partly
defendable, its proponents ignore that production of
gas for domestic use and injection into oilfields
needs investment. Funds are required to develop gas
fields, especially since those shared with Qatar
cannot be allocated by the government. Gas projects
certainly need foreign and private investments.

State funds have not even been sufficient for
infrastructure projects since the Third Five-Year
Development Plan (2000-2005). So attraction of foreign
and private investments has been a priority for the
government. Deals in the buyback and finance modes
have also been introduced with the aim of attracting
investments.

Recent negotiations with European countries including
Austria and Switzerland as well as with Turkey have
opened new horizon export and expanding production.

Managing director of the National Iranian Gas Company
earlier said that Iran was able to export $35 billion
cubic meters of gas to Europe once contracts were
finalized.

Under the agreement, the country will export $35
billion cubic meters via Turkey to Europe.

Gas export to the Indian subcontinent has topped that
agenda for the past 15 years. If signed, the deal
helps materialize an important part of long-term
policies to make Iran a major gas exporter.

Now, the question is whether Iran will be able to
become a major exporter and also to supply gas for
household, industrial, commercial sectors and power
plants, and to inject into oilfields. As per target of
Vision 2025, Iran should become the world’s third gas
producer by the year. It also has to attain a share of
eight to 10 percent of global trade in gas products.

Given that Iran has abundant gas reserves, the
objective can easily be achieved if it is properly
planned and its gas fields are developed.

The country has to redouble efforts to achieve an 8-10
percent share in the world gas market.

Global gas trade either through pipeline or in the
form of the liquefied natural gas (LNG) stood at 581
billion cubic meters in 2002. The figure reached 748
billion cubic meters in 2006, registering an annual
6.5 percent growth. If the current trend continues,
world gas demand will hit 1,800 billion cubic meters
by 2020. Some 8-10 percent of this figure will be
amounted to 144 billion to 180 billion cubic meters.
In other words, Iran has to increase its gas exports
by 12-15 folds and production by five times.

This is while the priority was given to domestic
consumption and injection of gas into old oilfield.

If production is increased to 600 billion cubic
meters, the country can become the world’s second gas
producer by 2025.

Petroleum Ministry figures suggest Iran has 28.3
trillion cubic meters while domestic consumption is
321 million cubic meters per day or 117 billion cubic
meters per year. If consumption rises by an average of
eight percent, Iran will need six trillion cubic
meters of gas annually by 2025. It is predicted that
total gas injected into oilfields will exceed 1.6
trillion to 1.9 trillion by 2025. So total gas
consumed will be eight trillion or 29 percent of the
country’s gas reserves by 2025.

Despite all the figures, some analysts and
policymakers support the idea of becoming a gas
exporter. They opine if the country sets aside only
five percent of its gas reserves for export, the
target set in Vision 2025 can be achieved.

But the important issue is that the country should
attract investments in the sector to meet domestic
demand and to increase production. The only way to
attract investments is opening the doors to foreign
investors. Another solution is to bolster private
sector’s role. Unless the government overhauls the
structure of its energy sector, these objectives
cannot be materialized