Greater Caspian Weekly Overview - December 27th
IRAN
Milestone year in Iran's gas to power plans
While Iran is preparing to enhance power plants to boost the efficiency rate from the current 35 percent to 45 percent, the country increased the share of gas in power plant's fuel significantly.
Deputy Energy Minister Houshang Falahatian said on December 20th that Iran plans to boost the efficiency of its power plants to 45-47 percent over the next three years through turning gas-fired plants into combined cycle ones without increasing the volume of input fuel.
According to the latest statistics, released by Energy Ministry, some 45.3 billion cubic meters (bcm) of gas was delivered to power plants during 9 months and 20 days of current fiscal year (Iran's fiscal year starts on March 21, then the mentioned period covers approximately 2nd, 3rd and 4th quarters of 2015), which indicates a 18 percent increase year-to-year.
During the mentioned period, Iran produced about 217 billion kWh of electricity.
The importance of boosting the efficiency of power plants is that natural gas shares about 85 percent of the power plant's fuel, while the thermal power plants share above 82 percent of the country's total power production.
Currently, the combined cycle power plants, which about 45 percent efficiency, shares only 25 percent in the country's total power output.
Falahatian also said on October 22nd that Iran’s thermal power plants have consumed 85 percent natural gas and 15 percent liquid fuel in the current Iranian fiscal year and this is a great achievement for the country’s power industry, because the use of natural gas as a clean fuel is an advantage in protecting the environment.
Iran’s power generation capacity is currently 73,744 megawatts, according to Iran Power Transmission, Generation and Distribution Company.
Iran's sweet gas production capacity stands at 172 bcm/y
Iran has the capacity to produce 172 billion cubic meters (bcm) of sweet gas annually and plans to increase that capacity, Azizollah Ramezani, the director for international affairs of the National Iranian Gas Company (NIGC) has said on December 23.
He put the country’s annual gas consumption at 170bcm, saying that gas accounts for 61% of energy consumption in Iran, Shana news agency reported.
Some 36,000 kilometers of high-pressure gas transfer pipeline has so far been constructed across the country, he added.
Iran’s gas production capacity is around 700 million cubic metres per day which will be boosted to 1200 million cubic metres a day by 2020, he said. The Iranian gas industry need $100 billion (USD) investment over the next five years, he added.
Iran increased gas production by 20 mcm/d during current year, while it announced earlier that two phases of South Pars would become fully operational. However, the inauguration of phases 15 and 16 of Iran’s South Pars gas field, which was set to be on December 20, has been postponed.
The development of phases 15 and 16 aims to produce 50 mcm/d of sweetened gas.
Iran has started early gas production from these phases since late 2014, producing 20 mcm/d of gas and this volume would reach full capacity (50 mcm/d) next week.
Iran's state-run gas firm ready to cooperate with Russian major
The National Iranian Gas Company (NIGC) is ready to cooperate with Russia’s Gazprom in gas transfer, refining, and storage projects, managing director of the National Iranian Gas Company Hamid-Reza Araqi has said on December 23.
NIGC and Gazprom can cooperate in different fields based on their responsibilities and political will of the two countries, Araqi added.
Considering that over 3.3 million cars in Iran are compressed natural gas (CNG)-fuelled, this could be a good field for cooperation, he noted.
Iran currently produces about 20 million cubic meters per day (mcm/d) of CNG.
“Gazprom’s cooperation with Iran will be mostly in exploration and production sectors,” IRNA news agency quoted the official who wanted not to be named. “We are hoping to transfer new technologies to Iran in this field.”
Iran’s NDF allocates $6 billion to petrochemical, refining projects
Iran’s National Development Fund has allocated $6 billion (USD) to the implementation of petrochemical and refining projects in the current Iranian year, which ends in March 2016.
Amir Hassan Fallah, the National Iranian Petrochemical Company’s director for finance and investment development, said that for the time being, LCs have been opened for some of the projects, Shana news agency reported on December 21.
The country's sixth five-year development plan (2016-2021) has stipulated that 36 projects should be implemented. Currently, 15 projects, mainly urea and ammonium, polypropylene, olefin, and aromatics, which are mostly in Chabahar and South Pars regions, can be implemented, he explained.
A minimum $450-500 million is needed for implementing the projects, he said, adding that the Iranian petrochemical industry needs $10 billion investment annually.
Marzieh Shahdaei, manager of projects at the National Petrochemical Company, also said on December 20 that eight projects will be inaugurated by the end of the current Iranian fiscal year (March 20, 2016).
She went on to say that 60-67 prioritised projects are being implemented, 16 of which have been completed by over 87%.
Shahdaei said on December 14 that Iran’s nominal petrochemical production capacity is around 60 million tons, but due to a shortage of feedstock, the output is about 44.5 million tons, of which 32.2 million tons is exportable.
There are 67 semi-finished projects which require $40 billion to be completed, she noted.
Meanwhile, 36 new projects have been launched in petrochemical hubs, such as Sea of Oman coasts, she said, adding that the projects require $32 billion and will add 64 million tons to the country’s petrochemical output.
After lack of progress with India, Iran may issue tender for Farzad-B gas field
Iran may hold a new tender if it fails to reach agreement with India on the Farzad-B gas field development project.
The gas field, which is located in the offshore Farsi block in the Persian Gulf, is estimated to hold 12.8 trillion cubic feet of gas reserves.
IRNA news agency reported on December 21st that the two countries have held intensive talks over the past months on transferring the development of the Farzad-B gas field to India, but the sides haven't reach a common terms yet.
National Iranian Oil Company’s managing director Roknoddin Javadi has said that a new international tender may be held in case a final agreement is not reached with India.
Last year, Iran had to put the Farzad-B in the list of projects for tender after the Indians dragged their feet on its development under U.S. pressure.
Iran's housing gas consumption equals entire EU
Iranian households consume as much natural gas as the European Union's total housing gas consumption, National Iranian Gas Company's (NIGC) spokesman Majid Boujarzadeh has said.
Gas consumption by Iranian households has reached 500 million cubic metres per day during the cold days of winter. That amount equals the consumption of 18 countries recorded by the European Union's total housing gas usage, he explained.
CAUCASUS
Shah Deniz gas output expected to increase
A BP official told Natural gas Europe on December 25 that the production level from Shah Deniz Stage 1 (SD1) is expected to increase in 2015 despite suspending operations for three weeks in August.
Public Relations Manager for BP Azerbaijan Tamam Bayatli said that currently some 29 mcm/d of gas is produced from SD1.
During 11 months of 2015 Azerbaijan exported 6 bcm of SD1's gas, about 1.6 percent more that the same period in 2014.
Total gas export from this field in 2014 was 6.5 bcm.
"The current figures indicate that SD1's output level to surpass 2014," she said.
SD1 output last year reached 9.8 bcm.
Shah Deniz's participating interests are: BP (operator – 28.8%), AzSD (10%), SGC Upstream (6.7%), Petronas (15.5%), Lukoil (10%), NICO (10%) and TPAO (19%).
Georgia to increase natural gas import from Russia by 25% in 2016
Next year Georgia plans to increase volume of natural gas from Russia by 25.2% against 2015 up to 250.5 mcm, reported İnterfax-Azerbaijan.
According to the natural gas balance for 2016 approved by the Georgian Energy Ministry, it is planned to import 65.9 mcm of commercial gas from Russia. Georgia will receive 184.6 million cub.m. (dropped by 7.7%) from Russian gas transit to Armenia, for which Georgia gets 10% of volume of pumping.
Georgia’s natural gas balance for 2016 is set for 2.423 bcm, up 0.8% against 2015.
In particular, Georgia plans to receive 2,156,800,000 cub.m. (decline by 1.8%) from Azerbaijan, which is the main gas supplier to the republic. From the Shah Deniz project, it is planned to receive 802.7 mcm (growth by 12.7%) and the remaining volume (1.354 bcm) will be supplied by SOCAR.
Georgia’s own production of natural gas is planned to be 15.6 mcm, two times higher, than this year.
In 2016 the republic is forecast to consume 2.405 bcm. (growth by 0.7%).
In particular, the so-called social gas will total 1.422 bcm. (growth by 7.1%). Of this volume it is planned to use 622 mcm (reduction by 4.3%) for generation of power at thermal power stations and 800.5 mcm. (growth by 18.1%) to supply population with gas.
The commercial gas supplied to the plants and organizations is planned to total 982.4 mcm, down 8.7% against 2015.
The losses during gas transportation are estimated at 18 mcm against 15 million cub.m this year.
Georgia’s natural gas balance for 2015 totals 2.4 bcm, up 15.3% against a year earlier, of which 200 mcm (down 3.2% against 2014) was planned to be received from Russia.
In 2015, Gazprom increased market share in Europe and Turkey by one percentage point, from 30.2% to 31.2%, according to calculations, reported Interfax.
While available statistics from the International energy Agency (IEA) on consumption in these markets during the first 9 months of 2015, Interfax Global Energy analysts say that in the fourth quarter of 2015, gas consumption in Europe will grow by 4% and Turkey 1%. This corresponds to a consumption of the overall market “Europe+Turkey” for the year 2015 in 522,8 billion cubic meters, which is 4.5% more than in 2014 (500,5 billion cubic meters).
According to preliminary calculations, which are consistent with the estimates of management at Gazprom, in the current year exports abroad will be 159.3 billion cubic meters (including in December – 15.4 billion cubic meters plus 33% by December 2014).
To this figure must be added the figure of 3.9 billion cubic meters deliveries to Lithuania, Latvia and Estonia (are members of the EU, but export statistics are “near abroad”), total 163.2 billion cubic meters and this corresponds to 31.2% of 522,8 billion cubic meters.
At the end of 2012, the share of Gazprom on the European market and Turkey was at the level of 25.4%, in 2013 – a 29.9%.
CENTRAL ASIA
Turkmenistan completes strategic cross-country pipeline
Turkmenistan has announced the completion of the “East-West” gas pipeline, a strategic pipeline that will connect the east and the west of the country with gas. The new pipeline will connect the gas compressor stations Shatlik in the eastern Mariysk region and Belek in the Balkan region in the west.
The 773-kilometre East-West gas pipeline has a carrying capacity of 30 billion cubic metres (bcm) of gas a year. It will unite big gas fields and create conditions for the export of Turkmen fuel to the world markets in any direction, wrote Neutral Turkmenistan newspaper.
The construction of the gas pipeline was carried out by state-controlled firms Turkmengas and Turkmennebitgasgurlushuk. It will start at the gas compressor station Shatlik in the Mary province and then, crossing the Mary and Akhalk provinces in the west, it will be connected to the Belek gas compressor stations in Balkan province, reads the article.
The Turkmengas Institute of Oil and Gas undertook the feasibility study needed for construction, as well as the engineering and project works.
Pakistan approves $200m budget for TAPI
Pakistan will hold a $200 million equity share of the proposed Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project.
The Economic Coordination Committee of the Pakistani cabinet gave the approval on Friday, Daily Times reported.
It also approved the release of $12 million out of this share for the preliminary works in four equal tranches, starting from January 2016 as per the disbursement plan.
The overall cost of TAPI project is $10 billion. Turkmenistan, being the consortium leader for the project, has agreed to contribute 85 percent of equity.
Kazakhstan pays back $400m loans early
Kazakh national operator KazTransGaz has announced that it has repaid a syndicated loan in the amount of $400 million early. The loan was received from international investment banks Citibank, ING Bank and Natixis, the press service of company reports.
“Previously, as part of the [company's] work aimed at the early repayment of foreign currency loans, KazTransGas has made a reverse acquisition of US dollar Eurobonds for the total amount of 270 million.
The company said that in order to reduce the debt burden KazTransGas carried in 2015, it carried out a number of successful transactions, resulting in a debt by its group of companies being reduced three times, by $300 million (USD).
JSC KazTransGas is the national operator of Kazakhstan in the sphere of gas and gas supply. The group of companies of JSC KazTransGas includes mining, transporting and selling gas and refined products businesses and organizations.