Iran's energy sector review

Iran inaugurated the first phase of the Persian Gulf Star Refinery last week. The project consists of three phases, with 120,000 barrels per day (b/d) of oil processing capacity each one. Recently, Seyyed Ebrahim Raeisi, the Iranian President Hassan Rouhani’s major rival in upcoming elections, said the refinery should have become fully operational in 2014 and the delay cost billions of dollars to Iran. He claimed that the refinery was completed by 70.4 percent when Rouhani took office in mid-2013. Oil Ministry released a report Apr. 4, saying the progress in the project in mid-2013 was only 47.9 percent. The ministry accused Raeisi’s advisors of giving him false information. "Raeisi’s advisors were in ex-president Mahmoud Ahmadinejad’s administration and they should clarify why the project started in 2007 and was completed by less than half in 2013," the Oil Ministry said. Why Iran started the project? Iran started construction of the refinery in 2007, after UN Sec...

Iran's total oil, gas petrochemical industry worth is $400 billion. According to an official document, prepared by national Iranian Oil Company and seen by Trend, the Opex (operating expense) of Iran’s oil and gas industry reaches $20 billion annually, about 2.5 times more than the global averages. Esmaeil Jabbarzadeh the Governor of East Azerbaijan Province also announced on Apr.27 that the province has high capability to supply oil and gas industrial equipment for projects in the country. "Currently there are about 200 companies in the province, which have had cooperation in the country’s oil and gas projects and Oil Ministry plans to meet with representatives of these companies in summer to evaluate their capabilities to take more share in maintaining, supplying equipment and repairing the oil and gas projects," he said. According to IRNA, Jabbarzadeh added that the Opex of Iranian oil and gas projects stands at $20 billion. The official document also confirms his ann...

Iran was allowed in November 2016 to increase its oil output by 90,000 barrels per day (b/d) in 1H2017 to 3.797 mb/d, based on OPEC’s oil cut deal. Other OPEC members had to decrease output by 4 percent to 1.2 mb/d, compared to October output, while Libya and Nigeria were exempted from cut. Oil price in 1Q2017 increased by 56 percent, compared to the same period last year as the OPEC compliance was 82 percent, 94 percent and 95 percent in three months of current year and the compliance of eleven Non-OPEC producers to cut 558,000 b/d was about 60 percent. The Cartel members are preparing to hold a meeting in May to discuss the extension of the OPEC deal for 2H2017. Kuwaiti Oil Minister Issam Almarzooq said on Apr.19 that Iran will probably be allowed to keep its oil production unchanged if OPEC decides to extend its six-month agreement on output cuts beyond June, Bloomberg reported earlier. According to an official document, prepared by Iran’s Oil Ministry and seen by Trend, ...

Iranian petrochemical plants produced 50.61 million metric tons (mn mt) of petrochemical products during last fiscal year that ended March 20. According to an official document prepared by the National Petrochemical Company (NPC) and seen by Trend Apr. 18, Iran’s actual petrochemical production level was 82 percent of the total nominal capacity. In other words, the country’s plants worked at 82 percent capacity during last fiscal year. Statistics in the document indicate that 96 percent of the planned production was realized. About 17 of Iran’s total 52 petrochemical plants worked at above 100 percent projected production level, including Nouri, Urmia, Tabriz, Qaed Basir, Mehr, Bisstoon, Carbon Iran and Shiraz, which worked at up to 110 percent projected output level. Iran’s petrochemical sector is one the country’s rapidly growing industrial sectors, which experienced a 7 percent growth in nominal capacity during last fiscal year. Iran’s actual production level during the pre...

Iran’s domestic electricity sales decreased by more than 21 terawatt-hours (TWh) to 206.3 TWh during the last fiscal year, according to Energy Ministry. The statistics of the annual report, released on the Ministry’s website indicate that the country increased the power generation capacity by about 2.64 GW, but the actual gross electricity generation decreased by 5.218 TWh during the last fiscal year, compared to the same period of the previous year. Iran’s fiscal year started on March 21. Electricity consumption Last fiscal year TWh Y/Y change TWh Share of total consumption Number of consumers (1000) Housing sector 70.587 -5.516 34.2% 27,220 Public sector 19.587 -2.609 9.5% 1,570 Industrial sector 64.535 -7.692 31.3% 222 Agriculture sector 32.712 -3.377 15.9% 396 Commercial sector 15.047 -1.633 7.2% 4,280 Street light 3.839 -0.178 1.1% - Total 206.308 -21.003 100 - The country increase...

Iran exported 2.6 million barrels of crude oil and gas condensate per day during the last fiscal year (ended March 20), of which 2 mb/d was crude oil, said Iran’s oil minister Bijan Namdar Zanganeh. Zanganeh said that during the sanctions era (2012-2015), about 70 million barrels of unsold gas condensate stockpile was stored on tankers, but after the removal of sanctions in January 2016, the volume was sold gradually and reached about zero by March 20, 2017, IRNA reported. Therefore, Iran had sold 2.6 mb/d of newly produced oil and gas condensate and sold 200,000 b/d from its gas condensate stockpile on water during last year. During the sanctions era, Iran’s oil (including gas condensate) output and export volume decreased from 4.1 mb/d and 2.5 mb/d to 3.3 mb/d and 1.2 mb/d respectively. Zanganeh said that Iran plans to keep the export volume unchanged during the current fiscal year. However, he has announced a week earlier that Iran plans to export 2.4 mb/d of oil and gas condensate...

Iran increased gas deliveries to power plants by 4.7 percent to 57.74 billion cubic meters (bcm) during last fiscal year (ended Mar. 20, 2016), while the plan was a 20 percent growth to 65 bcm. However, the statistics of Energy Ministry indicate a huge growth in replacing liquid fuels with gas in power generation sector during last four years. Iran had planned to deliver 65 bcm of gas to power sector during last year, and increased the growth by 8.5 percent until the end of fall, 2016, but it seems Turkmenistan’s cutting its gas export to Iran during winter caused a decrease in gas deliveries to power sector. Turkmenistan exported 9 bcm of gas to Iran in 2015, but it cut gas deliveries in January 1, 2017 due to Iran’s $2 billion debt to Ashgabat. However, weekly statistics of Iran’s Energy Ministry indicate that the gas flow to power plants during 11 days of current fiscal year (March 21-March 31) experienced a 14.13 percent growth to 1.411 bcm. Iran’s gas deliveries to p...