Iran's energy sector review

Iran is negotiating gas export to the Gulf States, including the United Arab Emirate. Iran's Mehr News Agency reported Sept.2 that negotiations between Iran and the UAE have continued for a long time, though Iran's energy ministry avoids giving further information about the issue due to "criticisms by the Oil Ministry". The criticisms refers to Iran’s Oil Minister Bijan Namdar Zanganeh, speech last week when he said that exporting cheap power is a rival to gas export, because Iran's gas clients purchase the gas to convert to power. Earlier, the Managing Director of Iran Power & Water Equipment and Services Export Company Bahman Salehi said Iran's peak power consumption level occurs in warm months, while during this time, Caucasus and Central Asian countries' power consumption declines. "Then Iran can become a power transit corridor in between northern and southern neighbors.” It's is not clear how Iran can transit power, while the

Iran has been revealing the details and aspects of the 6th Development Plan, a framework for a 5-year perspective of economic performance. According to a report, released by Shana on Aug.30, quoting the CEO of National Iranian Gas Company (NIGC) Hamid-Reza Araqi, the country plans to increase gas export from the current 10 billion cubic meters per annum (bcm/d) to 66 bcm by March 2021. Adding 56 bcm/d of gas to the export volume in five years seem a little ambitious, but regarding the development pace of South Pars and other new gas fields, the planned goal is quite possible. Iran currently produces about 245 bcm/a of raw gas, of which about 180 bcm/d is refined. Some 12 bcm/a of Iranian produced gas is flared, while about 34 bcm/a is re-injected into oil wells. Iran also delivers about 12.8 bcm/a of raw gas to petrochemical plants. With full implementation of South Pars by 2018 or 2019 Iran's refined gas production capacity will increase by 110 bcm/a to 365 bcm/a.

Iran's gas condensate export is more than pre-sanctions level despite a more than 5 percent decrease in volume during the last five months. According to Iran Custom Administration's monthly report, Iran exported 8.2 million tons on gas condensate during first five months of current fiscal year, started on March 2, indicating a 5.58 percent decline in volume year-to-year. Coming to revenues, the country's condensate export reached $3.56 billion, about 41 percent less than the same period last year. Iranian Oil Minister Bijan Namdar Zanganeh announced earlier that some 60 million barrels of unsold gas condensate is stored in tankers in Persian Gulf. However, according to the U.S. Energy Information Administration, Iran stores about 30 million barrels on the water, more than half is condensate, and the rest is mainly medium, sour crude oil. It's is not clear how Iran would sell the condensate storage, because Iran may find it challenging to find buyers for the