Iran warns of gas shortage despite production increase

Iran’s Oil Minister warned that a gas shortage would be unavoidable this winter citing big increases in consumption.

Bijan Namdar Zanganeh told the Ministry’s official information website, Shana.ir, on December 6th, that it iss projected that the country’s natural gas production increases by 100 million cubic meters per day (mcm/d) during the current (fiscal) year and the same volume would increase in next year, but regarding the current huge consumption growth, increasing the amount of gas import is unavoidable.

Iran imports some 40 mcm/d of gas from Turkmenistan. Iran holds 33.6 trillion cubic meters of proved gas reserves, sharing 18 percent of total global gas reserves which puts the country in the top of the world's gas holders list.

However, the lack of proper technology and investment led to long-term delays in implementation of gas production projects.

Zanganeh said that some 70 percent of Oil Ministry’s budget is allocated to development of South Pars gas field.

Iran has focused on the giant South Pars gas field since mid-2013, when President Hassan Rouhani took office. This field with about 30 trillion cubic meters of natural gas is joint between Iran and Qatar and counts a half of Islamic Republic’s gas production. The Iranian side of this field was divided to 24 phases, 10 of them has been operational until 2009. Iran inaugurated the gas production from phases 12, 15 and 16 with half capacity and is going to produce gas from phases 17 and 18 in mid-2015. All of these phases were completed more than 82 percent until mid-2013 and yet haven’t completed.

Iran increased gas production from the South Pars gas field by 60 mcm/d during a period between early 2014 and early December and preparing to increase this volume to 80 mcm/s in early 2015.

In case Iran completed the five phases 12, 15, 16, 17 and 18 until 2016, the country’s total gas output would reach 730 mcm/d and if Iran complete all remained 14 phases of South Pars by 2020, its gas output would reach 1.1 bcm/d. 

Gas consumption

Along with Zanganeh’s statement, the deputy head of the National Iranian Gas Company (NIGC) told Shana that this company delivered some 111.57 billion cubic meters of gas to various sectors during the first 260 days of the current Iranian fiscal year, which began on March 21.

Mojtaba Sheikh Bahaei, the deputy head of the NIGC said that delivering gas to various sectors including households, commercial sector, industry and power plants indicates an increase by 11 billion cubic meters compared to the same period of preceding year.

Sheikh Bahaei said the NIGC delivered 39.525 billion cubic meters of gas to the country's power plants during the period, 7.9 billion cubic meters more compared to preceding year.

He said that over 48.24 billion cubic meters of gas was delivered to the household and commercial sectors as well as small industry.

The figure increased by 2.88 billion cubic meters compared to the same days of last year, Sheikh Bahaei added.

The official said the national gas company supplied the country's major industries with 23.804 billion cubic meters of gas, 673 million cubic meters more year-on-year.

In the previous fiscal year, Iran delivered around 36 billion cubic meters of gas to its power plants and consumed around 27 billion liters of mazut and gas oil to generate electricity.

The Islamic Republic faced severe gas shortages last winter. In addition to cutting the gas supply to power plants, which led to burning $30 billion of liquid fuels, the Iranian government had to decrease gas delivery to petrochemical plants from 35 mcm/d to 15 mcm/d.

That caused a drop in the petrochemical production by 7.5 million metric tons during the last fiscal year (ended on March 21).

Iran hopes to handle the possible gas shortage in winter via boosted imports from neighboring Turkmenistan.