Gas Industry

The Iranian and Global Natural Gas Industry

Natural gas is the most promising fossil fuel worldwide, and the natural gas industry has a key role in the sustainable global development and a guaranteed supply of energy.

The global economic recovery since 2018; the future of natural gas industry; forecasts on the incremental trends in the global demand; and the share of natural gas in energy portfolio until 2040; as well as; the huge gas reserves existing in the Middle East, especially in IRAN, highlight the role of IRI and other Middle Eastern countries in meeting the worldwide energy demand.

The potentials of IRI to turn to the natural gas hub of the region, and increasing the country’s market share of the international gas trade; the development of corresponding domestic industrial units and the localization of cutting-edge technologies are key indicators of the validity of IRI’s strategic vision and decisions about the natural gas industry.

The potentials for the development of sectors of natural gas industry in various countries all over the globe, and the capabilities of the IRI, further to those of other countries, also highlight the undeniable role of IRI in the future of global natural gas industry.

The following lines tend to provide an overview of the Iranian, and global, gas industries to elaborate on the reason for the significance of IRI as the host to the Global Gas Show (GGS).

According to a June 2018 report by the British Petroleum (BP), holding 33.2 trillion m3 of natural gas, IRI is the second largest owner of natural gas reserves after Russia with 35 trillion m3 of natural gas. Qatar, Turkmenistan, US, KSA, Venezuela, UAE are the next ones in the rankings.

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Based on the data, IRI owns 17.2% of the global natural gas reserves, and Iran, Russia, Turkmenistan and Iraq own a combined share of 58.3% of these reserves.

The charts below indicate that the Middle East and the Common Wealth, own 50% and 31% of the worldwide gas reserves. In other words, about 80% of the global natural gas is concentrated in Iran and its neighboring countries.

This is while the respective shares of North, Middle and South Americas, Europe, Africa, East Asia and Oceania are only 5.6, 4.2, 1.05, 7.1, and 10 %.

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Based on the June 2018 report by BP, the largest producers of natural gas in the world are USA (734 billion m3), Russia (635.6 billion m3), IRI (223.9 billion m3), Canada (176.3 billion m3), Qatar (175.7 billion m3), and China (149.2 billion m3), while the world’s largest consumers of natural gas are USA (739.5 billion m3), Russia (242.8 billion m3), China (240.4 billion m3), IRI (214.4 billion m3), Japan (117.1 billion m3), KSA (111.4 billion m3) and Canada (115.7 billion m3).

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As reported by BP, the total global natural gas export through pipelines in 2017, was 740.7 billion m3, and Russia, Norway, US, The Netherlands, Turkmenistan, and Algeria are the major natural gas exporting countries.

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Importing 423.4 billion m3, Europe is the largest importer of natural gas. North America, East Asia and Common Wealth countries having imported, 146.8, 62.9 and 62.3 billion m3 are the next in the rank.

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The total volume of the exported liquefied natural gas was 393.4 billion m3 in 2017, and Qatar, Australia, Malaysia, Nigeria, USA, Trinidad and Tobago, Russia and Indonesia are exporters of liquefied natural gas.

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This will drive energy demand, through increased consumption of industrial goods, larger car fleets (a 60% increase, with 2.07 bn cars on the road by 2040), and more residential housing (33% more households, reaching 2.8 bn in 2040).

Most growth will be localized in developing Asia and developing Africa, with populations of 3.8 bn and 1.2 bn, respectively. This, in part, includes MENA.

Oil and coal will lose their positions respective to other fuels. Coal is projected to be the biggest loser in the global energy mix in 2040, as it will be increasingly replaced by natural gas and renewables. The share of coal in the global energy mix will decline from 27% in 2017 to 21% in 2040.

Between 2000 and 2017, natural gas demand globally grew by 2.4% annually, dominated by the consumption in the power generation sector.

The key changes to the projections are:

However, this trend is expected to decrease due to air pollution concerns, and coal’s share will drop to 31% in 2040. The share of gas will continue to rise from 22% in 2017 to 27.6% in 2040. In 2017, the share of renewables in the global electricity mix was about 6.4%.

Due to significant reforms in energy policies and governmental support in many countries, renewables will gain around 18.7% share. This report expects that over the outlook period, the share of nuclear in the global electricity mix will drop from 10.3% to about 8.2%.

 Additionally, the share of hydro will drop from 16% in 2017 to 13.2% in 2040. Therefore, in 2040 about 57% of electricity generation will come from fossil fuels.

Currently the refining of natural gas in IRI is performed by the South Pars Complex, as well as the Bidboland, Ilam, Parsian, Fajr-e-Jam, Hasheminajd, Sarkhoon and Qeshm refineries.

The total refining capacity of the National Iranian Gas Company (NIGC) shall reach 1,200 million m3 per day by 2025, according to the plans for developing gas refineries.

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The total of Iranian high-pressure gas transfer lines reaches 38,000 km. Distributed among 10 operating regions and including 81 compression stations, the network is capable of transporting nearly 800 million m3 of natural gas per day.

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The countries 20-year Perspective foresees that the existing 38,000 km lines and 81 compression stations be increased to 70,000 km and 140, respectively.
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The development of the Iranian natural gas distribution network (INGDN) has led to an increase in the share of this clean fuel in the domestic energy portfolio up to 75%. Currently, an over 345,000 km urban and rural gas distribution network is the vehicle for meeting the requirements of the 1,135 cities, 1198 villages and 11,460,000 gas service lines.

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Providing the feed of power plants is one of the plans of the Iranian Ministry of Petroleum. Further to saving the liquid fuels used and enhancing the added-value. This considerably helps save the environment. Supplying natural gas to power plants has increased during the past years and the using 67.7 billion m3 of natural gas in 2017, the Iranian power plants use only 10% of liquid hydrocarbons in their fuel portfolio. About 83 power plants currently have access to natural gas.

Supply of natural gas to industries faces the minimum limitations ever, and in 2017 over 37 billion square meters of natural gas were delivered to major Iranian Industries. Also over 2,426 CNG stations were active in Iran in 2017, and over 4.5 million gas-burning vehicles are used in Iran.

Saving ample quantities of natural gas is among the strategies of the NIGC. Currently the Seraje and Shoorije reservoirs in the center and north east of the country are used to this end. The former has a capacity of 2.5 billion square meters, which shall be increased to 4.5 after its development. Five further reservoirs all over the country are being considered for the same purpose.

Located in the Middle East, and having access to international waters through the Persian Gulf, Oman Sea, Indian Ocean, the Black and the Caspian seas, Iran is a very interesting country.

Iran has 15 neighboring countries, and 9 other countries form the second ring of the neighbors. Also the countries ties with the People’s Republic of China highlight the geopolitical significance of IRI in the region and its potentials of turning to the global and international natural gas hub.

So far, Iran has been exporting natural gas to Iraq, Turkey, Armenia, Azerbaijan, and Nakhichevan based on long, as well as short, term swap and gas/electricity exchange agreements. After ending its export to Russia, Turkey is currently the largest consumer of the Iranian natural gas. The 25-year gas export agreement between the two countries was signed in 1996 and the export actually started in 2002.

According to the Iran Armenia natural gas gas/electricity exchange agreement each square meter of natural gas is exchanged with 3 kW/h of electricity. Iraq receives Iranian natural gas in the two cities of Basra and Bagdad. As mentioned above, Azerbaijan and Nakhichevan are further consumers of Iranian natural gas.

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