Greater Caspian Region Weekly Overview - August 2nd
Iran resumes gas export to Turkey
A week after suspending gas delivery to Turkey due to a sabotage attack, Iran resumed gas delivery to Turkey on August 2nd, announced the director of the dispatching center of the National Iranian Gas Company to Shana.
He said that currently Iran is exporting 20 million cubic meters per day (mcm/d) of gas to Turkey.
An explosion hit the Iran-Turkey natural gas pipeline in the eastern Turkish province of Ağrı on July 28th.
Iran exports 27 mcm/d of gas to Turkey according to an 25-year agreement signed in 1996.
Iran to inaugurate South Pars phase 21 this winter
Iran is preparing to inaugurate a new phase in the giant South Pars gas field in winter.
The operator of phases 20 and 21, Alireza Ebadi said on August 2nd that the phase 21 has been developed to 78 percent.
Ebadi said that 9 wells of phase 21 have been drilled and the remaining two wells will be drilled by fall. “11 new wells will be drilled in phase 20 as well,” he said.
The mentioned phases would produce 50 mcm/d of gas.
Iran-Iraq pipeline become operational in 20 days
Managing director of the Iranian Gas Engineering and Development Company Alireza Gharibi said on August 2nd that Iran’s gas delivery to Iraq will become operational by August 22.
Iran has an agreement with Iraq to supply 25 mcm/d of gas to Baghdad’s power plants, but Gharibi said that some 5 mcm/d of gas will be supplied in first phase and the volume will increase in the beginning of next fiscal year. Iran’s fiscal year starts on March 21.
Iran is accelerating the construction of 6th cross-country pipeline with 110 mcm/d of gas transferring capacity and aimed to deliver 25 mcm/d of gas to Iraq. The remained section of this pipeline needs $2.2 billion investment.
The 611 km in length 6th cross-country pipeline starts from South Pars gas field and is stretched to Dehgolan in Iraq borders after crossing Khozestan, Lorestan, Ilam and Kermanshah provinces.
South Pars to experience low pressure in early 2020s
If the extraction of gas from the South Pars field continues as it is, the gas will experience decline in pressure by 2023, IRNA news agency reported August 1st.
From that time on, the extraction of gas from South Pars will be possible only by using compressors, the report said.
However, using compressors can be effective for only 10 years, and therefore it is expected that by 2033, Iran will completely discard the field, unless technological advancements bring new extraction methods.
Huge decrease in Iran’s propane, butane export
Iran’s butane export decreased by 31.28 percent to $376 million, while propane export experienced a 24.26 percent decrease to $540 million during the first 4 months of current fiscal year, started on March 21st.
According to the Custom Administration’s monthly report, Iran exported 1,048 and 702 thousand tons of propane and butane respectively.
The country also exported 8,171 thousand tons of petrochemical products with worth $4.696 billion, remained unchanged in value, but increased in volume by 12 percent year-to-year.
Iran produced 15.6 million tons (+4%) of petrochemical products in the first 4 months of year.
Iranian gas needs €10 billion in investments to reach EU
Azizollah Ramazani, National Iranian Gas Company’s international affairs manager said on July 31st that stretching a gas pipeline from Iran to Europe will need a €10 billion investment.
He said that so far nothing new has happened regarding gas export to Europe and stressed that as the situation seems ripe, strong will is needed and the sides should pursue talks seriously.
He pointed out that according to studies conducted by the European Parliament, Iran could export 25 to 30 billion cubic meters of gas to Europe annually.
Ramazani said that Iran prefers to export LNG to the EU rather than natural gas through pipelines.
However, Iran’s Oil Minister Bijan Namdar Zanganeh said on August 2nd that European markets are not Iran’s gas export priority and the country prefers to sell gas to regional Asian countries.
EU lifts sanctions on two Iranian gas companies
The European Union removed two Iranian oil and gas companies from its sanctions list on July 31st.
Petropars Operation and Management and Petropars Resources Engineering were rescued from European sanctions.
The companies are developing several South Pars gas fields.
Pakistan says its infrastructure not ready to take Iranian gas
All Pakistan CNG Association (APCNGA) on July 28th said Pakistan should upgrade its infrastructure so that it could sustain Iranian gas pressure.
Iran has completed its part of the pipeline to transport 750 mmcfd gas to Pakistan while Islamabad has started laying 880-km-long pipeline but it hasn’t considered upgrading gas distribution network, said Ghiyas Abdullah Paracha, central leader of the APCNGA.
That’s while Pakistan announced earlier that it is preparing to construct pipeline inside the country to take Iranian gas.
On the other hand, the Economic Times reported July 28th that New Delhi seeks a revival of Iran-Pak-India gas pipeline.
A senior oil ministry official will lead a delegation of oil industry executives shortly to Iran to press for India's interest in revival of the pipeline project that was put on the back burner for years as well as developing the Farzad-B block, a person with knowledge of the matter told the Economic Times.
India ONGC Videsh Ltd (OVL), the offshore arm of Oil and Natural Gas Corporation Ltd, started new negotiations with Iran to to develop the Farzad-B gas field.
Iran ready to export Turkmen gas
A senior Iranian official says Iran is ready to jointly export Turkmen oil and gas instead of playing as a transit route for Ashgabat only.
"We favor sustainable economic relations with Turkmenistan and have devised numerous work plans for expanding infrastructures in the country," said deputy oil minister Mohammad-Taghi Amanpour.
"Turkmenistan seems to prefer to export commodities like oil, gas and other energy carriers through Iran… [However,] we offer joint exports with the country instead of only transiting [its goods]. This would cover all the two countries' needs and expectations," said the top advisor.
He said Iranian petroleum ministry endorses Iranian companies that launch factories in neighbouring Turkmenistan because it would lead to the promotion of industrial infrastructures in both countries.
Azerbaijan
Southern Gas Corridor’s capitalization increases by over 7 times
The Southern Gas Corridor CJSC’s registered capital increased up to $725 million upon the decisions of the Supervisory Board and the Shareholders' Meeting, the State Oil Fund of Azerbaijan (SOFAZ) said.
The company’s initial capital amounted to $100 million. But its capital increased to $300 million in February 2015 as a result of changes in the nominal share of the company.
"SOFAZ transferred $318.75 million to the treasury account of the country’s Ministry of Economy and Industry in the first half of 2015,” the statement said. “As a result, the share of the fund’s capital of the company has reached $369.75 million (51 percent)."
Uzbekistan
Uzbekistan ups gas export to Kazakhstan
Uzbekistan has exported about 1.77 billion cubic meters (bcm) of gas to Kazakhstan during the first half of current year, which indicate a 39.4 percent increase year-to-year, the State Revenue Committee of the Ministry of Finance of Kazakhstan reported.
Uzbekistan exported 2 bcm of gas to Kazakhstan in 2014. The total gas export of Uzbekistan in this year to Kazakhstan, Russia and China was 8.5 bcm.