Iran's energy sector review

Iran says it sets the gas feedstock price for petrochemical plants at a level that raise the profit margin of them to 25-30 percent. National Petrochemical Company CEO Marzieh Shahdaei said Feb.8 that excepting the petrochemicals which use liquid feedstock, others have at least 25 percent profit margin, Shana reported. Before, the Deputy Oil Minister Amir Hossein Zamaninia also told Trend in August 2016 that Iran’s petrochemical projects are the most attractive sector for foreign investors with above 25 percent profit margin. According to official documents, prepared by Oil Ministry and seen by Trend, Iran’s petrochemical plants’ net profit reached $4.514 billion during last fiscal year, ended March 20, 2016. Iran produced about 49.097 million metric tons of petrochemicals in 2016, about 9.4 percent more than 2015. Some of Iranian petrochemical plants with uses only liquid feedstock have very low profit margin or operating at loose. Despite the growth of actual output, I...

While Iran’s energy minister says the drop in gas export price is 1.5 times more than the decline in power export price, Oil Ministry claims that electricity exports for Iran are totally unprofitable. Energy Minister Hamid Chitchian said Jan. 28 that Iran’s gas export price plunged from $450 per thousand cubic meters in 1H14 to about $250 currently (a 44 percent decrease), but the power export price experienced only a 20 percent decline to $100 per thousand kilowatts hour (kWh). In 2016, Oil Minister Bijan Namdar Zanganeh said, regarding low efficiency of power plants, that exporting electricity is not only unprofitable, but also damages Iran’s gas export policy. Deputy Oil Minister Amir Hossein Zamaninia also told Trend in August 2016 that Energy Ministry has a huge amount of delayed debts for taking fuel from Iran’s national oil and gas companies. Now, SHANA news agency, which belongs to Oil Ministry, has reported regarding the 37 percent efficiency of power plants that for ...

Iran signed an agreement on replacing its old taxis with new 10,000 gas-fired hybrid taxis. The agreement was signed between Iran’s Taxi Company and Iran Fuel Conservation Company. According to Iran’s 5-year development Iran, it should import 17,000 buses and 140,000 taxis that use gas (CNG) as fuel. Iran also plans to improve its rail transport system to save some 13 billion liters of gas oil demand per year. Iran’s transport sector consumes about 74.9 million liters per day of gasoline as well as about 60 million liters per day of gas oil, which shares 25 percent of the country’s total CO2 emissions. During the signing agreement ceremony, the CEO of Fuel Conservation Company said that the government has already issued the licence for renewing 65,000 trucks worth $2.7 billion, the project of enhancing the railroad fuel consumption efficiency worth $7 billion, as well as enhancing the efficiency of 600,000 engine rooms (boilers) worth $2 billion as well. According to an of...

Iran says bunkering (refuelling of ships) in Iranian ports is 5-7 US dollar cheaper than the same service in UAE’s Fujairah port. "About 17 shipping companies are sailing to Iranian ports in Persian Gulf and this is a great opportunity to boost bunkering operations. International ships can refuel in Iran’s Qeshm port, 120 miles far from Fujairah, to get cheaper fuel," Iran Shipping Lines chairman Mohammad Saeidi said. Qeshm port’s bunkering facilities with 1 million tons capacity were inaugurated Jan.26. It should be noted that marine trade shares 85 percent of Iran’s total trade turnover with foreign countries. Just six countries, including UAE are responsible for almost sixty percent of global bunker sales, according to OPEC’s estimations. Iran was not included in this list. UAE’s Fujairah is the world's second largest bunkering port, with annual sales of around 24 million tons. Iran claims that the about 80 percent of bunkered fuels in Fujairah is of Iranian...

Siemens has announced that it received a major order for 12 compressor trains with "high double-digit million euro range" worth for two onshore natural gas processing plants in Iran. Commercial operation is expected end in 2018, said the message from the company. One of the major plans of Iran is to import compressor and pumps for refinery projects worth up to $41 billion, by 2025. The projects include $27.3 billion worth in gas and $19.8 billion in oil refining sector. According to an official document, prepared by Iran's Oil Ministry and seen by Trend, Iran would import at least 1317 compressors in various sizes with worth $336 million by 2025. More than 80 percent of the needed pumps and compressors for Iran’s refineries would be imported. Iran also needs 1931 pumps to be imported with worth more than $530 million by 2025, the document says. In total, Iran has planned to inaugurate annually 9 oil refineries and 15 gas refineries from 2015-2025, with 210 an...

Ten years after resuming the development of Iran’s second biggest offshore gas field, Kish, with 1.4 trillion cubic meters of in-situ gas reserves and 70 percent recovery rate, the country hasn’t been able to progress noticeably. Last month Iran signed a memorandum of understanding with Shell on studying the reservoir, which contains 514 million barrels of gas condensate as well. An unnamed source told Fars news agency January 18 that Iran is likely to hire Shell to develop Kish gas field, a giant field in the Persian Gulf, but spokesman of Shell told Trend that he can’t comment on this issue. According to an official document, prepared by Iran’s Oil Ministry and seen by Trend, the first phase of project is aimed to produce 28.3 million cubic meters per day (mcm/d) of gas as well as 11,300 barrels per day (b/d) of gas condensate. The field, divided to three phase, would produce 85 mcm/d of gas after becoming full operational. Iran started developing Kish gas field 48 years ago...

Iran has recently published the  list of 29 foreign companies  qualified to participate in development projects of 49 oil and gas fields based on a newly designed agreement, called the Iran Petroleum Contract (IPC). Five companies in the list are Japanese, including Inpex, Japan Petroleum Exploration, Itochu, Mitsui and Mitsubishi Corporation. Japan is one of Iran’s major oil clients, which imported more than 225,000 b/d of Iranian oil in 11 months of 2016,  according to Reuters’ calculation . Iran’s Mehr News Agency also reported Jan. 13 that Japan imported 214,000 b/d of Iranian oil in 2016, about two times more than the sanctions level (2012-2015). The sanctions on Iran were removed in January 2016. According to the report, during 2016, Iran signed one-year and long-term agreements with Japanese JX Nippon Oil & Energy Co., Idemitsu Group, Showa Shell (a part of the Royal Dutch Shell Group), TonenGeneral Sekiyu and Cosmo Oil Company to export oil. Iran al...