Iran's energy sector review

Dalga Khatinoglu, exclusively for Shana   After increasing both Iran's oil production and exports by about one million barrels per day since elimination of sanctions in mid-January, it is the time to wait for Iran's gas surprise. Iran's actual sweet gas production level increased to above 178bn m3 last year, while the raw gas production capacity reached 260bn m3/yr, thanking to commencing new phases of giant gas field with Qatar, South Pars. Iran has boosted the raw gas output from this field to above 132bn m3/yr last fiscal year, which ended on March 21, but 5 new phases are expected to become operational during current year. The final production capacity of these 5 phases is about 55bn m3/yr and some of them are currently producing gas with half capacity. The Iranian side of South Pars has been divided to 24 phases, of which stages 1-10, 12, 15 and 16 are fully operational now. Once, the all 24 phases of this filed become operational by 2019, the country...

Latest statistics indicates a huge increase in Iran's liquid fuels exports thanks to the gas output rise. Iran produced 178.1 billion cubic meters (bcm) of sweet gas during the last fiscal year (FY), ended on March 21, while the raw gas production capacity stands at 700 million cubic meters per day (mcm/d), which makes 255 bcm yearly. The sweet gas output rose 6 percent during the mentioned period year-to-year. The country annually uses about 47 bcm of raw gas in the CNG and petrochemical plants, and in re-injection to oil fields. Iran's flare gas stands at around 11 bcm per year. Iran saw a huge increase in the exports of liquid fuels over the past year, Esmail Hasham Firouz, director for imports and exports at the National Iranian Oil Refining and Distribution Company (NIORDC), told Mehr news agency on May 9. Meanwhile, Hassan Aghayan, the NIORDC deputy managing director, told SHANA news agency that the liquid fuels consumption decreased significantly during the la...

Iran's power sector suffers heavenly from three problems - gas fuel shortage, low efficiency of power plants as well as huge amount of electricity waste during the distribution process. The country has increased gas delivers to power plant by more than 20 billion cubic meters since 2013. Currently the share of natural gas fuel in power generation is above 82 percent, compared to 56 percent 3 years ago. However, the country still needs another 20 billion cubic meters of gas to curb the liquid fuel burning in power plants, which shares about 40 percent in CO2 emissions in Iran. The other problem of Iran's electricity sector is the low efficiency of power plants, which stands at 37 percent on average. Last decade, Iran decided to convert the thermal power plants to combined-cycle types, with above 45 percent efficiency, but the share of combined-cycle power plants in the country's total electricity production has remained unchanged at 25 percent during the last several ...

Despite a huge rise in Iran’s oil exports, the pace of output growth seems to be much less than that of exports. In the meantime, the main part of oil output is expected to come from old fields rather than the new ones. According to the latest statistics released by the International Energy Agency and Reuters surveys, Iran increased oil export to about 1.55 million barrels per day (mb/d) in March 2016 from the 2015 average export level of 1.1 mb/d. But the country’s total oil output rose by less than 300,000 b/d in February 2016 according to an OPEC monthly report released in mid-March. Earlier, Iran said it would increase oil exports by one billion barrels per day. The additional barrels are to come from the existing production capacity, which was shut down during the sanctions era. On March 30, the head of the International Energy Agency Fatih Birol announced that Iran is expected to add half a million barrels of oil supply a day within one year from its existing oil field...

While Qatar is producing some 23 percent of the global helium demand from the North Dome gas field (called South Pars in Iran), the Islamic Republic has no plan to extract helium from this joint field. Currently Qatar is producing over 40 million cubic meters of helium per year (mcm/y) by operating two plants in South Pars, the third plant is projected to be built in coming years. Helium is not expensive and its price is about $2.5-$4 per cubic meter, but the restricted amount of global helium reserves and unique industrial usage, make it very important. Annual global production of helium is about 175 million cubic meters per year and it is estimated that the earth's precious helium resources will run out within 25 to 30 years. Currently, the US with 73 million cubic meters of production per day is leading the main producers, including Russia, Qatar and Algeria. Total helium reserves in the US stand at 20.6 billion cubic meters, according to the US Geologic Survey. Russi...

Iran's power sector passed a milestone year in terms of replacing liquid fuels by natural gas as fuel. The latest weekly report of Iran's Energy Ministry, published on its official website on March 15 says the country's power plants were supplied with 53.5 billion cubic meters (bcm) of natural gas during 350 days of the current fiscal year, or 16.4 percent more than in the same period last year (Iran's fiscal year will end on March 20). On the other hand, diesel and mazut consumption in electricity sector has decreased by more than 31 .3 percent and 31.6 percent respectively to around 5.7 billion liters and 6.7 billion liters in the mentioned period. The country's total power production capacity also stood at 73,933 megawatts (MW), about 781 MW more than the previous year. The growth is far less that the targeted plan, which predicted at the beginning of the current fiscal year that the country's power growth would experience a 5-percent growth. Iran ha...

As Pakistan blames the sanctions imposed on Iran for delaying gas intake from this country, however a Pakistani official claims there is another reason. Pakistani Parliamentary Secretary for Petroleum and Natural Resources Shahzadi Umerzadi Tiwana said that Qatar's LNG price is lower than the price of Iran's natural gas. that of Iran. In particular, she mentioned the recent $16-billion deal with Qatar, saying that Qatari LNG is low priced as compared to gas that Iran would be supplying to Pakistan. According to Pakistani sources, LNG arriving in any particular month will fetch 13.37% of the preceding three-month average price of a Brent barrel (considering the present Brent price as a proxy, that would equate to $167.5 per 1000 cubic meters). Comparing the figure with the revenues of Tehran gas deals with Turkey and Iraq, it indicates that Iranian gas wouldn't compete with Qatari LNG on Pakistani market. In 2014 Iran was exporting gas to Turkey at above $420 ...