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Iran’s Future Clearly Points to Gas

With the lessening of U.N. sanctions and expected inflow of foreign capital and technology, it is predicted that gas will be the basis of Iran’s future prosperity and foreign exchange earnings.

The country is home to 33.5 Tcf of natural gas, equivalent to 18% of the world’s total gas reserves, and has the fourth-largest oil reserves, estimated at 158.4 billion barrels. Iran’s gas production was 38.6 Bcm in 1995 since which time it has burgeoned to 227 Bcm in 2016.

Iran’s gas pipeline network

In the first nine months of 2017, the National Iranian Gas Company (NIGC) distributed 515 MMcm/d of natural gas, of which 200 MMcm/d was destined for power plants, 147.4 MMcm/d was supplied to households and 103 MMcm/d went to industry. The commercial and small industry sectors received 45 Mcm/d, while the remainder entered storage.

Despite its massive gas reserves, Iran has struggled to meet domestic demand for gas let alone exports. Since 1997 Iran has imported gas from neighboring Turkmenistan to meet demand.

“In the winter months, when gas is used for heating, industrial consumers are still regularly taken off the grid to ensure households are supplied with enough gas, and as long as this is the case, a barrier remains to larger Iranian natural gas exports,” explained David Ramin Jalilvand, a Berlin-based analyst and consultant.

Years of insufficient domestic investment in gas production and distribution has meant capacity has not kept up with burgeoning demand for power. U.N. economic sanctions, which only began to be lifted as late as 2015, restricted access to foreign funding and technology. In sum, years of insufficient investment have prevented Iran from reaching its energy potential.

Gas Sector

The NIGC operates a pipeline network of 36,000 km to serve the needs of 92% of the Iran’s population of 82 million, including major cities such as Tehran, Tabriz and Isfahan. NIGC is also responsible for associated gas infrastructure, gas supply networks and consumer connections, as well as underground natural gas storage facilities. Current plans envisage a pipeline network of 45,000 km by 2025. Read more

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