Iran is developing plans to turn the country into a gas hub of the Middle East through cooperation with Qatar, Russia and Turkmenistan.
This was announced on Wednesday by Iranian Oil Minister Javad Owji.
“Through cooperation with Russia, Turkmenistan and Qatar, we are trying to have a gas hub in the Asaluyeh [port] in the Persian Gulf region, with preparations being planned,” he said.
According to him, Iran has a “unique” gas network in the region and the world, and “the stage is fully set for Iran to become a gas hub in view of the volume of the country’s gas reserves and infrastructure.”
In addition, according to Owji, the Oil Ministry has included in its agenda a plan to increase Iran’s share in energy trade with neighboring countries.
Currently, Iran ranks second in terms of gas reserves in the world. The country is also the world’s third-largest producer of natural gas after the United States and Russia with a production of about 1 billion cubic meters per day.
Asaluyeh is a major industrial and oil and gas production center in the southern province of Bushehr on the Persian Gulf coast. Asaluyeh was chosen as a site for the facilities of the Pars Special Economic Energy Zone, being the closest point to the largest natural gas field in the world – the South Pars/North Dome gas condensate field. The South Pars field is located in the Persian Gulf and contains 8% of the world’s gas reserves – this is 14 trillion cubic meters of gas and 18 billion barrels of gas condensate. South Pars is divided between Iran and Qatar.
In November 2022, the Iranian Oil Ministry signed cooperation agreements with Russia’s Gazprom. The deal worth about $ 40 billion provides for the development of gas fields in Iran, the construction of gas pipelines, as well as installations for the production of liquefied natural gas.
That time Owji said that Iran and Russia, in addition to carrying out swap supplies of oil and petroleum products, are discussing the possibility of swap gas supplies.
For Iran, the gas swap on the northern borders is very important from the point of view of domestic consumption, while there is no need to supply gas from the hydrocarbon-rich southern regions to the north. As a result some volumes of gas will be available for export in equivalent to the swap partner’s consumers in third markets.
Earlier, the Iranian Gas Engineering and Development Company officially offered Turkmenistan and Russia to buy gas in the north and supply it in the south to any country, at their request.
Iran has the appropriate infrastructure to implement such plans. A pipeline with a capacity of 100 million cubic meters per day is already being built to the border with Pakistan.
In addition, Iran has a capacity to handle up to 100 million standard cubic meters of gas per day. This comes to about 36.5 billion cubic meters of gas annually.
However, given that Kazakhstan and Turkmenistan are potential transit nations between Iran and Russia, some logistical issues must be resolved and agreements must be reached in order to carry out swap operations between Iran and Russia. The Central Asia-Center gas pipeline system can serve as a transmission infrastructure for this project, but it needs to be switched to reverse.
It is obvious that Iran’s intentions to establish itself as a gas hub are based on expanding gas exchange (swap) operations with neighboring energy powers.
Turkmenistan in general puts the diversification of gas export routes at the forefront of its energy policy. Consequently, the Iranian gas hub may become an additional option for the supply of Turkmen energy sources to South Asia, for example, to Pakistan. In the western direction, the gas swap is already working for delivering Turkmen gas to Azerbaijan.
Meanwhile, Iranian experts have long considered Turkmen gas as a strategic resource on Tehran’s energy agenda. “As a prerequisite for Iran to achieve the goals of its macro-strategy to become a regional energy center, the country must also employ a maximum amount of gas imports from Turkmenistan”, says the report entitled “Considerations and Strategic Requirements in Energy Trade between Turkmenistan and Iran” of the Research Center under the Parliament of Iran.
///nCa, 8 June 2023
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