A stronger network in Iran

What is NIGC’s top priority at the moment?
Gas production is increasing in the upstream sector and within NIGC’s refineries, especially at the South Pars gasfield. So, NIGC has put the development of gas transmission systems on its agenda. These systems are for transferring new volumes of gas from production sources, which are mainly located in the southern regions of the country, to the main consumption centres, which are generally located in the central and northern areas of the country.
To increase gas transmission capacity, completing IGAT-6 and IGAT-7, constructing IGAT-9 and IGAT-11, and finishing their branches are among the major plans. IGAT-6 construction is mostly completed and important parts of the trunkline and its branches are being operated. Remaining sections and branches will be operational within the coming months. These are currently in various design and execution phases. For instance, the full-scale exploitation of IGAT-6 (Asaluyeh-Dehgolan) will be initiated soon.
Furthermore, constructing IGAT-9 in parallel with IGAT-6 is a must to achieve the gas export goals that the Ministry of Petroleum has established for our neighbouring countries in the north and in Europe.
In the central area, constructing IGAT-11 (branching out from IGAT-7) is one of the priorities of NIGC, and it is currently being designed.
This pipeline will mainly reach Kerman. But after realising the potential and existing demands of this region, the next phase will be carried out. This is completing the route from Asaluyeh to the IGAT-7 branch, and the pipeline will reach Birjand and Yazd as well. The construction schedule of this pipeline during these two phases is highly dependent on the estimated gas demands of the mentioned routes and plans for gas exports to Oman and Afghanistan.

What is the importance of IGAT-7 for increasing Iran’s gas exports?
IGAT-7 is located in the southeastern part of the country, and will meet the demands of this region, especially the Sistan and Baluchestan province. After negotiations and the signing of a contract, this pipeline will be used for exporting gas to Oman.
The completion of this pipeline will also lead to the development of the Iranian ports on the coast of the Gulf of Oman, especially the Chabahar Port and the Mokran region, the third petrochemicals hub in the country. In the long term, upon the resolution of differences between Iran and Pakistan, this pipeline will be used to export gas to Pakistan and India, and will be considered the major rival of the TAPI pipeline.

What is the current balance between natural gas consumption and production rates?
Iran’s gas consumption over the first 10 months of the year [March 21, 2017-January 20, 2018] was 162.4 bcm [5.74 tcf], and the volume of gas extracted from gas reserves was approximately 201 bcm [7.1 tcf]. Considering these figures, NIGC has a high safety margin when it comes to supplying major domestic gas needs. Gas consumption in this period compared with the same period last year experienced an increase of 7.5 bcm [265 bcf].
The country’s export obligations have been met in full. Moreover, in Tir 1396 [June 22-July 22, 2017], we initiated the natural gas export process to Iraq, which is considered a major target market for our gas exports.

A large portion of this gas consumption is triggered by power plants. As the country keeps demanding more electricity every year, how has this consumption increased?
The process of fuelling power plants, which is of great importance to our country both environmentally and economically, has been growing continuously over the last few years. The volume of gas delivered to power plants in the year 1393 [March 2014-March 2015] was about 50 bcm [1.77 tcf]. It amounted to 58 bcm [2.05 tcf] in 1394 [March 2015-March 2016] and 61 bcm [2.16 tcf] in 1395 [March 2016-March 2017].

How has Iran’s gas production increased over the past few years?
From the beginning of the current year until the end of Dey [March 21, 2017-January 20, 2018], the approximate amount of gas produced in the country was 201 bcm [7.1 tcf]. For the same period, it was around 186 bcm [6.57 tcf] last year [March 2016-January 2017], 172 bcm [6.07 tcf] in 1394 [March 2015-January 2016] and 164 bcm [5.79 tcf] in 1393 [March 2014-January 2015]. These figures indicate the increasing and continuous trend of gas production within NIGC’s facilities during [President] Hassan Rouhani’s first administration.

What kind of annual production growth has Iran seen?
On the scale of a full Iranian year, the amount of natural gas produced by NIGC during the years 1393 [2014-2015], 1394 [2015-2016] and 1395 [2016-2017] was, respectively, 202, 210 and 229 bcm [7.13, 7.42 and 8.09 tcf].

What opportunities will all of these national gas transmission pipeline projects unlock for Iran?
Not only will the construction and completion of the sixth, ninth and eleventh national pipelines increase the durability of the country’s gas transmission network, it will also complete the existing network of high-pressure pipelines. This will result in better, steadier and more long-term gas exports. It will also establish regional and trans-regional gas swaps.
In total, approximately USD 8 billion will be provided over the next four years for further development of the country’s gas transmission system, including pipelines and compressor stations. The objective is to reach a transfer capacity of 1.2 bcm [42.4 bcf], as the third member of the global producers’ club, with a production rate of 1 bcm [35.3 bcf] of gas per day. All these projects will be completed by the end of the Seventh Five-Year Development Plan, from 1401-1406 [March 2022-March 2027].

For IGAT-9 and IGAT-11 development projects, an MoU between South Korea’s KOGAS and NIGC was signed. Have you reached an agreement yet?
With regards to attracting foreign companies such as KOGAS to participate in the construction of the ninth, eleventh and sixth national gas pipelines, many comprehensive negotiations have been carried out. Nevertheless, due to the lack of common ground between NIGC and KOGAS for the aforementioned projects, they will be carried out using domestic resources. The ninth and eleventh gas pipelines are being constructed by NIGC and NIOC under a buy-back contract with a USD 10-billion investment.

What is NIGC’s plan for IGAT-6 and gas exports to Iraq now that the pipeline is fully operational?
The sixth national gas pipeline was constructed to increase the natural gas export capacity, establishing gas relations between Iran and Iraq and attempting to access European markets. The short-term plan for feeding Baghdad’s and Basra’s power plants with gas is to deliver up to 7 mcm [247 mcf] per day, then continuously increase this to hit 18 mcm [636 mcf] and, upon completion of the contract, maximise gas delivery to 35 mcm [1.24 bcf].

Which steps has NIGC taken regarding Iran’s aims to reduce gas flaring in the country’s producing and refining facilities?
In most of our gas refineries, the amount of gas currently flared into the atmosphere is much less than before, but we intend to keep lowering this amount. Accordingly, we have planned several actions and have already accomplished some of them.
For instance, we have achieved a 78% reduction in the amount of gas flared in the second refinery of the South Pars Gas Complex compared to the original design. For this particular refinery, we concluded a contract with a consortium of Sofregaz and an Iranian construction company for recycling and consuming the flared gas using modern technologies.
In general, the amount of flared gas in proportion to the amount of gas that entered refineries was 0.97% in 1394 [March 2015-March 2016]. According to the Sixth Five-year Development Plan, this amount should be reduced to 0.85% in 1399 [March 2020-March 2021].

In terms of its status as a gas exporter, where do you see Iran in the coming years?
Due to the size of the Asia-Pacific, Europe and Persian Gulf markets, and our massive gas reserves, the main gas export strategies include using Iran’s geographical location to secure the global gas supply; co-operating with Russia, China, CIS countries, Turkey and the European Union; and extending the co-operation between neighbouring countries and the Arab states of the Persian Gulf.
While the Arab states of the Persian Gulf (Oman, the UAE, Kuwait and Bahrain) are all becoming natural gas importers, Iran is considered a potential gas exporter, and this points to Iran’s key role in the regional energy trade. Moreover, establishing bilateral or multilateral relations with overseas countries is a must for meeting growing natural gas and LPG consumption in markets such as Europe, Africa and Latin America.
From this point forward, we are expecting to enter a new export scenario and gain a share of the international gas trade. Our current share of the global gas trade is 1%, but considering our resources, we hope it reaches 10% before the year 1404 [March 2025].