S&P Global Platts - Iran's first LNG export terminal project with a planned capacity of 10.8 million mt/year has stalled due to the impact from the US sanctions, a company executive said Thursday.

The project's condition underscores the impact of Washington's sanctions on Iran's petroleum sector that are set to take effect on November 5 and the debilitating impact it is having on Tehran's long-term plans to exploit its gas reserves.

Iran LNG, a project jointly owned by the National Iranian Oil Company Pension Fund and the National Iranian Gas Export Company, had already started construction near the port city of Assaluyeh, Mostafa Sharif, general manager for market research and economic appraisal at NIGEC said.

"This project's storage capacity has been built and gas intake facilities are available, but the liquefaction facility has not been built due to the sanctions," Sharif said at the Gas Asia Summit of Singapore International Energy Week.

"After the sanctions removal we hope that we can revive the project," he added.

Iran LNG is located in the Pars Special Economic Zone on the country's southern coast, around 75 km from Assaluyeh. It was expandable to four LNG trains from its initial plan of two trains, according to project plans, and also considered a proposal for a floating liquefaction facility at one point.

Tehran has also been forced to shelve other LNG export plans that were on the drawing board. Iran holds nearly 18% of the world's natural gas reserves, making it the world's second-largest gas reserve after Russia, according to the US Energy Information Administration.

"We have been in discussions with large companies previously like BP, Total and Shell, but given the current situation all projects have stalled at the moment," Sharif said.

He said Iran's first priority under the grip of US sanctions was to supply gas by pipeline to its neighboring countries, mainly Turkey where it supplies around 10 Bcm/year, and that Iraq has very good potential for importing gas for the large number of gas-fired power plants.

Iraq had some plans to utilize its own gas reserves but the plans are not on schedule due to the country's security situation, Sharif said.

"I hope that the [sanctions] situation is temporary and we will return to a good situation very soon," Sharif added.