Iran is looking towards at least five years to boost its natural
gasproduction and exports, even if sanctions on the country are removed
with a successful final nuclear deal with the P5+1 group, Fitch Ratings
said Friday.
"Iran has the long-term potential to become one of
the world's top gas producers...but...it will take at least five years
to ramp up production and build the pipelines necessary to become a
large gas exporter," Fitch said.
Theglobal credit ratings
organization noted Iran has34 trillion cubic metersof natural gas
reserves,around18 percent of the world's;however, due tothe
international sanctions, Iran's oil productionandexports are having
delays, whilemost foreign oil companies have stopped operating in Iran.
"Historically,
Iran has never been a major exporter of natural gas, with most of its
limited exports going to the former USSR in the late 1970s," Fitch said,
adding the International Energy Agency (IEA) estimatesIran's current
gasexportsabout 9 billion cubic meters (bcm) to Turkey, Armenia and
Azerbaijan.
"From 2005 to 2014, Iranian gas production increased
nearly 70 percentto around 173 bcm," Fitch said. The country's current
gas production capacity is around 107 bcm, but IEA expects 67 bcm will
be added from the gas-rich South Pars field before 2020.
- Gas output level in South Pars
On
May 6,Iran's Oil MinisterBijan Zangeneh saidnaturalgas production
capacity from the South Parsfield is planned to reach700 million cubic
meters (mcm) a day in threeyears' time, and perhaps even shorter
ifsanctions on Iranare removed.
Mehdi Yousefi,
themanaging-director of Pars Special Economic Energy Zone,PSEEZ, said
on June 1 thatSouth Pars gas field is producing 450 mcm of natural gas,
andhas 29 phases under development at the moment.He informed that
development of all phases of Iran's South Pars field is planned to be
finished by March 2018.
On July 4,the head of Iran'sPars Oil
and Gas Company (POGC),Ali-Akbar Shabanpour,informed thatnatural gas
production from South Pars field increased by 15 mcm aday, bringing the
total daily output volume to 465 mcm.
While South Pars field
holds estimated proven reserves of 14 trillion cubic meters (tcm), North
Pars field is to have another 1.3 tcm, according to Fitch.
"In
2006, the China National Offshore Oil Corporation signed a $16
billiondeal to develop North Pars and build a 20 million tons per annum
liquefied natural gas (LNG) plant," Fitch noted.However, because of
thehighcost and complexity ofLNGprojects, it would take at least a
decade for Iran to exportsignificant amount of LNG.
- Iranian gas to Europe viaTurkey's TANAP
Fitch
emphasized that it is possible for Iran to export its gas to Europe via
Turkey'sTrans Anatolian Natural Gas Pipeline (TANAP) once the
necessary infrastructure is complete.
To become operational in
2018, TANAP will havean initial capacity of 16 billion cubic meters to
carry Azeri gas through Turkey to Europe.While its capacity isplanned
to increaseto23 billion cubic metersby 2023 and to31 billion cubic
metersby 2026, Iran can send its gas to Europethrough it in future.
"While
it may be possible to increase the throughput of TANAP...by building
one or several gas compression stations, we estimate that such
construction as well as gas production ramp-up in Iran could take
several years. Therefore, Iran could become a large gas exporter by the
end of this decade at the earliest," Fitch explained.
The rating
organization also mentioned an alternative, by pointing out toIGAT-9.
Also know asPersian pipeline,Pars pipeline, orIran–Europe pipeline,
thisa $7 billionproposed project to carry 35 bcm of Iranian gas every
yearto Turkey, Greece, Italy, and further into Europe.
- Iran's domestic gas consumption
Fitch stated thatIran's gas consumption has increased66 percentbetween 2005 and 2014, reaching170 bcm.
"This
rate of growth has been second only to China and has made Iran the
world's fourth biggest gas consumer behind the U.S., Russia and China,"
Fitch said.
"We therefore expect a significant part of the newly
commissioned capacity over the next few years to continue serving the
domestic market," theglobal ratings organization concluded.
(Anadolu Agency)