TEHRAN (ISNA)- A new petroleum minister and an easing of international sanctions raise prospects for new pipeline exports of natural gas by Iran, according to Facts Global Energy (FGE), London.
Iranian Oil Minister Bijan Namdar Zanganeh has appointed experienced people to administrative positions and made completion of stalled phases of offshore South Pars gas field a priority, FGE said in a December report.
If controversy over the Iranian nuclear industry is settled, the Islamic Republic has the potential to export 3-4 bscfd of gas by pipeline to neighbors such as Oman, the United Arab Emirates, Kuwait, Pakistan, and Iraq, the report concludes. Prospects for LNG exports, however, are nil.
South Pars progress
Supergiant South Pars field now can produce about 9 bscfd of gas from 10 phases and has 14 phases under development. All but five nonproducing phases are in early stages and unlikely to be on stream before 2020, FGE reported. Likely to come onto production in the next 3-4 years are Phases 12 and 15-18. They would boost production by 7 bscfd and 280,000 b/d of condensate.
Phase 12, development of which is the most advanced of the five, ultimately will be 3 bscfd of gas and 120,000 b/d of condensate. The first of six sweetening trains for Phase 12 will start up by mid-2014, allowing production of 500 MMscfd. Other trains will be on stream by 2015.
National Iranian Oil Co. has installed the first production platform in Phase 12 and drilled six wells.
Phases 15 and 16, under development for 74 months, probably will require 2 more years of work before production can start, FGE said. They’re expected to produce 2 bscfd of gas and 80,000 b/d of condensate.
Phases 17 and 18 have a total of 11 wells out of 44 wells planned. Remaining drilling will take at least years, FGE said. One gas sweetening train for these phases might be complete next year, but construction of others will require 2-3 years. The phases are expected to produce 2 bscfd of gas and 80,000 b/d of condensate.
Oman and Iraq
Under a memorandum of understand recently signed with Oman, Iran is to start exporting within 2 years as much as 1 bscfd of gas by pipeline to the sultanate, which will use 70% of it domestically and the rest for liquefaction at an underutilized plant at Sur.
FGE believes Iran will be unable to complete infrastructure required to support the Omani exports before 2018-19 at the earliest. It said the countries haven’t yet agreed on the gas price, which Iran wants to be $11-14/MMbtu while Oman seeks $6-7/MMbtu.
With Iraq, Iran has a contract to deliver by pipeline 850 MMscfd of gas and is negotiating a second contract that would push export rates to 1.6 bscfd by next year. It’s building a 227-km, 48-in. pipeline between Ilam and Khosravi near the border. Iraq is building a 220-km, 42-in. pipeline to deliver gas to power plants near Baghdad, but completion has been delayed by security problems.
Iran also is negotiating for construction of a pipeline connecting Khoramshahr, Iran, with Basrah, in southern Iraq, for delivery of 700 MMscfd.
The price of Iranian gas sold in Iraq remains contentious.
Demand and exports
FGE noted a decline in growth of Iranian gas consumption, partly because of price reform begun in December 2010 and partly because of economic problems.
The Petroleum Ministry nevertheless projects a 1 bscfd gas shortage this winter. Recent agreements increase Iran’s export commitments to more than 2.7 bscfd in 2014-15.
“Considering more delays in South Pars development projects,” FGE said, “it is unlikely that Iran will achieve this targeted export level in the short term.”
LNG export plans have fallen victim to sanctions and withdrawals by international partners and technology providers. FGE doesn’t expect Iran to export LNG but said the lifting of all sanctions might enable the government to reorganize a project called Iran LNG, which envisioned two liquefaction trains with total production capacity of 10.8 million tones/year.
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