Iran boosts exports of natural gas to neighbor states

The Daily Star, Lebanon
April 27 2004

Iran boosts exports of natural gas to neighbor states
Islamic Republic hopes to expand future sales to Asia, Europe

TEHRAN: Iran, which holds some 15 percent of the world’s natural gas
reserves, is boosting exports of gas to its neighbors in the hope of
picking up sales to Asia and Europe in the future.

“In the short term, we are looking to export our gas to neighboring
countries, but we are also working on exports of liquefied natural
gas (LNG) to Asia and Europe,” said Rokneddin Javadi, director of
Iran’s National Gas Export Company. “The issue is that the projects
to export to neighbors, such as those across the Persian Gulf, can be
completed in two years. But an LNG export project needs five years.”

He said Iran to sign within the next two weeks a contract to supply
15 million cubic meters a day by pipeline to the UAE.

Javadi said Iran was also in talks with Kuwait and the UAE for two
other similar contracts, hoping to export 1.5 billion cubic meters to
the two countries each year. Also expected later this year are
contracts with Armenia and other former Soviet republics in the
Caucasus, covering the sale of 3 billion cubic meters annually.

A 25-year contract with Turkey allowed Iran to sell 3.5 billion cubic
meters there in 2003. That figure is expected to rise to 5 billion
cubic meters in 2004, if a contractual dispute can be worked out.
Iran is counting on this figure to jump dramatically if it can get
LNG exports by tanker moving further afield, notably to the
potentially huge markets of the Indian subcontinent, China and

Key statistics

Iran’s natural gas reserves of 26.6 trillion cubic meters are the
second largest in the world after Russia’s. The country’s reserves
are located in onshore and offshore structures, with South Pars
attracting most of foreign investment into the sector. Geologically
related to Qatar’s 380 North Field, South Pars has been divided into
25 development phases and is estimated to hold 8-10 percent of world
reserves. The Iranian government plans to use South Pars to jumpstart
a market in natural gas exports to Europe and Asia that can rival

Tehran would like to double production to around 190 billion cubic
meters per year by 2005. But the ambitious target will require
building five liquefied natural gas plants with annual capacity of at
least 30 million tons per year. Companies interested in Iranian gas
include BG, BP, Reliance Industries of India, TotalFinaElf and
Petronas of Malaysia. Other uses for natural gas include reinjection
into ageing oil fields that have been damaged after years of
overproduction and damage from the Iran-Iraq war of 1980-88.

By Siavosh Ghazi, Agence France Presse