25 Jan 2024 | 10:39 UTC

INTERVIEW: Iran aims for 1.5 mil mt/year LNG output in 2026: deputy minister

Highlights

Plans to develop mid-sized LNG plant first

Construction 53% complete for 20 mil mt/year Iran LNG project

Developing LNG for expanding gas export outlet, balancing winter supply

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Iran aims to start 1.5 million mt/year production at a medium-sized LNG plant at Asaluyeh in 2026, with its output set to be lifted by an Iranian company for domestic use, as well as for exports, Vahidreza Zeydifard, the country's deputy minister for engineering, research and technology at the Ministry of Petroleum, told S&P Global Commodity Insights Jan. 25.

"At present, we start with one unit [with the capacity of 1.5 million mt/year]," Zeydifard said in an interview with S&P Global on the sidelines of the 42nd JCCP International Symposium in Tokyo.

"Our target is producing LNG in 2026. But it depends on many things, and we are trying to meet these targets," he said, adding that the plant is being built at the location of the planned 20 million mt/year Iran LNG project.

"We want to use facilities of the Iran LNG to help this project because it's easier for us to make this plant than a 20 million mt/year plant."

The 1.5 million mt/year LNG plant, which will be operated by the National Iranian Oil Company, has secured an Iranian offtaker, with the lifting volume is to be used domestically as well as for exports, Zeydifard said.

Zeydifard, who previously had a 30-year career at the National Iranian Gas Company as well as being a board member of the Iran Gas Transmission Company, said Iran is focusing on developing the medium-sized LNG plant after major European companies withdrew from other planned LNG projects in the wake of sanctions on the country.

International oil companies, with much-needed money and advanced technology, have pulled out of the OPEC member's underdeveloped oil and gas sector since Washington imposed sanctions on Tehran over its disputed nuclear program.

53% complete

The deputy minister, however, said that the country has made "good progress in the field of construction of equipment" such as building cold box and turbo expanders domestically.

Describing Iran LNG as one of the country's "mega projects," Zeydifard said that "currently the progress of construction of this mega project with a total capacity of 20 million tons per year is 53%."

In addition to the 1.5 million mt/year medium-scale LNG project, he added that "we have already started to study the construction and development of a mini-LNG project to prevent flare-ups and gas storage for winter season as well."

"In general, despite the sanctions, we have been able to make significant successes in the fields of turbo compressor, control systems, and modern technologies," he said.

Asked about current challenges faced in developing gas and LNG projects in Iran, Zeydifard said: "We have had challenges in the technical and equipment sectors as well as investment."

"In order to overcome the technical and equipment problems, we have tried to use strong internal resources that we have been very successful," he added.

"For investment issue, we have used domestic banks and oil pension fund, but at the same time, we welcome the participation of international companies in the field of technology transfer and license investment to speed up our projects."

Asked why Iran is pursuing LNG projects, Zeydifard said: "Two main reasons. One of them is for exporting the natural gas to other countries. You know that exporting by LNG is easier than pipeline."

"Second [reason] is related to balancing of natural gas in winters in Iran," he said adding that producing LNG in summer would help the country to use it in winter for heating.


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