Greater Caspian Region Weekly Overview
Iran
South Pars gas field increases output
Iran increased gas production from the South Pars by 15 million cubic meters per day (mcm/a) in early June, while it is preparing to launch two new phases by the end of the current month.
Iran announced last week that started early gas production from Phase 18 of South Pars gas field. The volume of produced gas is 15 mcm/d, but this figure will rise during coming months.
Furthermore, Reza Forouzesh, development manager of South Pars Phases 15 and 16 said on June 6th that these fields have been developed 98.18 percent and early gas production would start by the end of month.
Phases 15 and 16 are defined as one project. Phases 17 and 18 also are a united project. At full production, some 112 mcm/d of raw gas will be produced.
A representative of Iran’s Gamma Company, involved in development of the refinery of South Pars Phase 12 told Natural Gas Europe on June 5th that some 75 mcm/d of gas is produced from this field. The final production capacity of this phase is 82 mcm/d.
Iran currently produces 300 mcm/d from South Pars (Phases 1 to 10, 12 and 18), and projected to increase this volume to 400 mcm/d and 720 mcm/d by the end of 2015 and 2018 respectively.
Iran eager to increase gas export to Turkey
Iran has exported 9.76 billion cubic meters per annum (bcm/a) of natural gas to Turkey last year. However, It is evaluating the ways to increase this volume.
The managing-director of National Iranian Gas Exports Company Ali-Reza Kameli said on June 1st that current infrastructures has a capacity to deliver more 1.2 bcm/a of gas to Turkey, but if Turkey installs compressors on their own soil, Iran can deliver more 2 bcm/a of gas to Turkey. He said that Iran has offered building thermal power plants in Turkey and feed them with Iranian gas.
Iran has offered a doubling of gas export to Turkey in April, but Ankara rejected that.
Iran meets with French companies
In the sideline of 26th World Gas Conference (WGC), held in Paris during last week, National Iranian Gas Company’s (NIGC) managing director met with the heads of French companies including Total, Technip, Schneider and Vinci Energy to attract them in Iran’s upstream gas projects.
According to Iran’s State TV, IRINN, the head of NIGC Hamid Reza Araqi introduced 18 investment package proposals to foreign companies.
Iraq said that Iran will be able to export gas to Europe with implementation of some projects, aimed to increase both energy efficiency and gas production in Iran.
Iran’s gas re-injection to oil fields increased significantly
Iran increased gas re-injection to old oil fields by 69 percent to above 3 bcm in last two months. 80 percent of Iran’s active oil fields are in their second half-life. Iran re-injected 93 mcm/d of gas to oil fields last year, but this figure must double to keep crude oil production level high.
Iran re-injects the major amount of gas to oil fields in summer.
Iran plans to join Turkish Stream
Iran plans to join the Turkish Stream pipeline, aimed at transfering 63 bcm/a of Russian gas to Turkey and Europe.
The Director of the National Iranian Gas Company (NIGC) for International Relations Azizullah Ramazani told Mehr News Agency on June 7th that Iranian gas may joint to Turkish Stream and be delivered to Europe in future.
Azerbaijan
Azerbaijan is to increase gas production
The State Oil Company of Azerbaijan Republic (SOCAR) announced on June 4 that the country would increase gas production to 30.2 bcm in 2015. Azerbaijan’s natural gas production stood at 29.6 bcm last year.
Total gas production output is expected to increase, while SOCAR’s own gas production would decrease from 7.2 bcm in 2014 to 6.5 bcm in the current year. The decrease of SOCAR’s gas production will be compensated by Shah Deniz, ACG oil field; both are operated by BP plc.
SOCAR announced on June 5th that delivery of the associated gas, produced in Azeri-Chirag-Guneshli fields to SOCAR will increase to 3.1 bcm in 2015, while this figure was 2.76 bcm last year.
Some 9.2 bcm of produced gas from these oil fields will be re-injected.
Some $12 Billion invested in Shah Deniz Stage 2
Azerbaijan announced last week that some $12 billion investment put in shah Deniz Stage 2 (SD2) so far, including the development of gas delivery equipments in Georgia.
Vitaliy Baylarbayov is Deputy Vice-President of SOCAR for Investments and Marketing announced that 30 percent of needed investment for SD2 has been put so far.
Total costs for realization of this project is projected to reach $45 billion, including the development of SD2 gas field, improving the South Caucasus Pipeline, construction of Trans Anatolian Pipeline (TANAP) as well as Trans Adriatic Pipeline (TAP).
It’s expected SD2 start gas production by 2018 and deliver 6 bcm/a of gas to Turkey. Transferring some 10 bcm/a of SD2’s gas to Europe is expected to start by 2021.
Italian Snam considers stake of up to 20% in TAP
Italian gas infrastructure company Snam evaluates to take a stake of up to 20 percent in the project to build the Trans Adriatic Pipeline (TAP).
Snam’s chief executive Carlo Malacarne told Reuters on June 4th said "We are ready to evaluate buying up to 20 percent of the project. TAP’s shareholding is comprised of BP (20 percent), SOCAR (20 percent), Statoil (20 percent), Fluxys (19 percent), Enagás (16 percent) and Axpo (five percent). Construction of TAP is planned to begin in 2016.
The initial capacity of TAP will be 10 billion cubic meters per year, but it can easily be expanded to 20 billion cubic meters per year as the new volumes of gas come on stream.
Azerbaijan produces 62 bcm gas from Shah Deniz Stage 1
Since the Shah Deniz Phase 1 (SD1) became operational in November 2006, the total volume of gas extraction reached 62 bcm till June 1, 2015, Khoshbakht Yusifzadeh, SOCAR Senior Vice President told on June 5th.
Some 4.6 bcm of extracted gas was exported to Georgia and 34 bcm/d was transferred to Turkey. The remained volume was consumed in Azerbaijan.
The Shah Deniz project contract was signed on June 4, 1996. The project partners are BP (operator with 28.8%), TPAO (19%), SOCAR (16.7%), Petronas (15.5%), LUKoil (10%) and NICO (10%).
Azerbaijan to construct petrochemical complex with 12 bcm/a demand
Azerbaijan is preparing to start construction of Oil and Gas Processing Complex (OGPC), needs 12 billion cubic meter per annum (bmc/a) of gas feed.
A source from SOCAR told Natural Gas Europe anonymously that a foreign company (or companies) can establish a joint venture with SOCAR to involve this project, but according to the strategic importance of OGPC, SOCAR wants to have at least a 51 percent share in that.
Turkmenistan
EU proposes a consortium to realize Trans Caspian Pipeline
Europe has proposed establishing a consortium to realize the under-water Trans Caspian Pipeline, aimed to transfer Turkmen gas to Azerbaijan to be supplied to EU through Southern Gas Corridor.
Turkmenistan’s Minister of Petroleum and Mineral Resources Muhammetnur Halylov said on June 3 that this country has an abundant natural gas reserves Ashkabat is considering the European market as one of the promising areas of gas supply.
The energy ministers of Turkmenistan, Azerbaijan, Turkey and the European Commission held a meeting in Ashgabat in early May and signed a declaration.
Khalylov said that on its part, EU offered to create a consortium with the participation of European companies that will finance Trans Caspian Pipeline’s construction.
Uzbekistan
Russia to fourfold gas production in Uzbekistan
Russia’s LUKOIL is planning to increase the natural gas production in Uzbekistan by four times to 16 bcm/a by 2018, Uzbekistan’s Uzdaily newspaper quoted the head of the company Vagit Alekperov on June 4th.
He noted that President of Uzbekistan Islam Karimov gave a permission to develop new project on development and construction of Kandym gas field. Uzbekistan exports gas to China.
Tashkent, Seoul sign $47 billion contract, includes energy sector
Uzbekistan and South Korea signed 60 agreements and contracts last week within the visit of Islam Karimov to Seoul and in the result of the Uzbek-Korea Business Forum, of which 55 are in trade-economic, investment and financial-technical cooperation.
The press service of the President of Uzbekistan said that about 34 agreements were signed in investment cooperation sphere, including five projects in petrochemical and chemical industries, nine projects in automobile industry and five projects in electrotechnical sphere.
Among them are perspective projects on deep processing of hydrocarbons, introduction of modern technologies on processing of gas to methanol and olefins, modernization of nitric acid production capacities, production of three global models of automobiles, production of new generation of automobile engines, transmissions and components, production of modern home appliances.