News ID: 156181
Published: 0243 GMT August 03, 2016

Gas exports to reach 40 bcm per year

Gas exports to reach 40 bcm per year

Iran's gas export will soon reach 40 billion cubic meters (bcm) per year in the near future in view of the four new international contracts it has recently signed, said the director of National Iranian Gas Company (NIGC) for international affairs.

Iran is expected to export between 68 bcm and 80 bcm of its gas per annum by 2021, as stipulated in the Sixth Five-Year Economic Development Plan (2016-21), said Azizollah Ramezani in an exclusive interview with Iran Daily.

Referring to regional countries' priorities over gas export, he said there is a gas annual demand of 50 bcm in the region, adding, "This will enable us to sell up to 30 bcm of gas to other countries, particularly European states."

Some 10 countries in the region need Iran's gas, he noted.

"Exports to China and India are on agenda. We have even the capacity to sell LNG to South Korea and Japan."

On exports to Europe, Ramezani said Turkey is willing to cooperate with Iran in this regard in case Ankara's mutual demands are met by Tehran.

"Nevertheless, we are initially required to identify European markets and carry out feasibility studies.

"It is 3,300 kilometers from Assalouyeh, Bushehr province, to nearest European border. Although it is a long distance, pipelines with a length of more than 5,000 km — currently available in market — make gas transfer to Europe an achievable target for Iran. We can also sell LNG to Europe," he said.

In the year to mid-March 2016, Iran exported gas to Turkey, Nakhchivan and Armenia and purchased it from Turkmenistan and Azerbaijan, he recalled.

"This year, Iran is expected to execute two other gas contracts it has already signed with Iraq. We have also held negotiations on increasing exports to Armenia and transferring gas to Georgia through Yerevan."

Ramezani said Iran signed a 25-year gas export deal with Turkey in 1996 and began its overseas sales to the country in 2011, adding, therefore, Turkey will remain one of Iran's main gas customers until 2026.

Under the terms of this contract, Iran exports 30 million cubic meters of gas per day (10 bcm per annum) to turkey, he stressed.

"Iran has, so far, sold 78 bcm of gas to Turkey fulfilling half of its commitments under this agreement."

Iran is also prepared to begin exports to Iraq, he said, adding, the contract to sell gas to Baghdad was signed in 2013.

"In 2016, an addendum was added to Baghdad's gas deal extending and increasing the term of the contract and volume of exports. According to the addendum, Iran will initially export 7 mcm of gas to Baghdad per day and after 21 months, will raise the figure."

He noted that the deal requires Iran to export 10 bcm of gas per year to Baghdad.

The NIGC director said the contract for exporting gas to Basra, signed in 2015, requires Iran to transfer 9 bcm of gas to the region per year. The volume will vary between 35 mcm per day and 20 mcm per day in warm and cold seasons respectively.

Commenting on the latest status quo of exports to Iraq, Ramezani noted, "The infrastructures for transferring gas to Baghdad in the Iranian territory have been ready since mid-March 2016. However, the Iraqi side has recently completed laying the pipelines. Exports will most likely begin by August 21. Initially, we are to transfer 7 mcm of gas to the region per day."

He stressed that exports to Basra will start by the end of 2016.

On gas swap with Azerbaijan, he said, "As per the contract, we are expected to receive and hand over gas from and to the Azeri side in Astara and Nakhchivan respectively."

Ramezani said the contract to import 8 bcm of gas from Turkmenistan per annum was signed in 1995, adding nevertheless, the figure increased 6bcm per year following a revision in 2009.

"In 2009, we signed a gas export agreement with Pakistan and planned to implement it as of 2014. Iran has laid a 900-kilometer pipeline from Assalouyeh (Bushehr Province) to Iranshahr (Sistan-Baluchestan Province) for the project. But the Pakistani side has not completed construction of the pipeline in its territory."

On the problems of exporting gas to Pakistan, he said in view of the fall in LNG prices, the Pakistani side has changed its attitude toward gas imports and favors LNG imports contracts over long-term deals.

"The two sides have to hold negotiations to decide whether Pakistan is still willing to continue with the contract. However, Iran is currently using the pipeline for domestic purposes."

On India's gas imports, he said, the country no more plans to receive Iran's gas via Pakistan, adding it intends to import energy through high seas.

The NIGC director put Iran's gas exports and imports at 2.5 bcm and 1.9 bcm during March 20-July 21, 2016, respectively.

"Therefore, the trade balance has been in our favor so far," he concluded.

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