TODAY.AZ / Business

Portuguese official optimistic about EU-Iran gas deal

19 May 2017 [10:08] - TODAY.AZ

By  Trend


Iran has invested in Sines port to operate the LPG shipments with Portugal, Ruben Eiras, the advisor in Portugal's ministry of sea, told Trend.

According to him, Iran and Portugal are more than hopeful about the future cooperation.

"At the moment, there is an Iranian investment in the port of Sines to commercialize LPG shipments. It is part of market dynamics. And specifically, they are focusing on infrastructures to distribute LPG in African market," he said.

Coming to natural gas deal between Iran and EU, Eiras said that he is optimistic about Iran – Europe gas relations.

"For what I know, if there is will and investment capacity, this will lead to other cooperation as well," he said.

Iran is expanding its LPG and gas condensate markets due to output growth in South Pars. Iran increased hydrocarbons production capacity from South Pars by 9 percent during the last fiscal year. The daily gas output stands at 500 million cubic meters (mcm/d), gas condensate at 560,000 barrels per day and LPG (butane and propane) at about 25,000 tons.

Iran’s LPG production level was 5.6 million tons per year in 2014 and reached about 9 million tons in early 2017.

During the last fiscal year (ended March 20), Iran exported $1.222 billion worth of propane at $350/tons as well as $772 million worth of butane at $377/tons.

Iran also has announced repeatedly about its willingness to export natural gas (methane) to European markets via pipeline or LNG. Iran has a semi-finished LNG plant, suspended mid-2000s due to sanctions, but hasn’t re-launched the plant yet. The capacity of project is 10.4 million tons per year of liquefaction of natural gas. It has costed $2.5 billion and needs further $5.5-9.5 billion to be completed.

Iran also have to construct a $6 billion 1800-km pipeline, stretched from South Pars to Turkey borders.

Then it may be able to supply gas to the Trans-Anatolian Natural Gas Pipeline, connected to Trans Adriatic Pipeline in Europe in case the shareholders of projects show green light.

Both pipelines are Turkish-European part of Southern Gas Corridor, aimed to transit 16 bcm/yr of Azerbaijani Shah Deniz’s gas to Turkey and Europe in 2018 and 2021 respectively. The final capacity of the project is 31 bcm/yr.

Iran’s gross gas output stands at 285bn m3/yr. However, it plans to increase this volume to about 440 bcm/y by 2021 after full operational of South Pars and starting gas production from other projects like Kish gas field.

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