Natural gas follows oil and coal in terms of share of the global energy market. However, its share has been increasing rapidly as a result of capturing some market share from both coal and oil, and it currently provides 23% of the world’s energy needs. As a first-class energy that is easily substituted for other types of traditional pollutant fossil fuels, natural gas has considerable potential to penetrate energy markets.
The growing role of natural gas in the global energy market is mainly due to: • a sharp rise in the proven natural gas reserves worldwide and the importance and priority given by the major oil-importing countries to security and diversification of sources of energy; thus, their dependence on oil imports as the single source of energy is reduced; and • growing concern for the environment and increasing strength of environmental pressure groups, which has led to a definite push by some governments to promote the use of natural gas as the most favoured fuel.
The Islamic Republic of Iran has the second largest proven natural gas reserves in the world. To date, the country’s proven natural gas in place is over 27,570 trillion cubic metres (tcm), equal to 18% of the world’s total natural gas reserves.
The country’s natural reservoirs are mostly located within a few kilometres of its sea shores and the shallow waters of the Persian Gulf, which are easily accessible and relatively inexpensive to develop. One such reservoir is the South Pars gas field, which is the world’s largest single natural gas reservoir with 13,177tcm of natural gas and 19 million barrels of condensate in place.
The advantageous geographical location of these giant natural gas reserves guarantees continued and reliable supply of this environmentally friendly energy to the global market over a long period of time. Gas is exported in the form of liquefied natural gas (LNG) or via pipeline to the Pacific Rim, Europe, Pakistan and neighbouring countries, India, China or other Far Eastern countries such as Japan and South Korea.
Taking into consideration the potential of Iran’s available resources and capabilities for implementing huge natural gas projects and attracting international foreign investors, the country’s administrators decided on rapid expansion of its natural gas industries, with the intention of becoming the leading natural gas exporter and major energy supplier of the world in the decades to come.
Liquefied Natural Gas Projects Overview
Iran has the resources to become a dominant player in the global LNG market. Some of its competitive strengths are listed below: • the existence of a world-class, low-cost gas resource base in the South Pars field;
• a significant condensate revenue stream to underpin LNG economics;
• strategic geographical location, paving the way for access to markets of Europe, Asia and Far East countries;
• strong government support and motivation for LNG exports; and • access to a diverse workforce, including a variety of technical and commercial expertise.
.GIF)
.GIF)
South Pars is a reliable gas resource with extremely competitive upstream development costs. The high volume of condensates produced from this field provides a significant revenue stream. Based on the experience of other LNG projects elsewhere in the world, the contribution of liquids revenues will be essential to underpin the economics of the overall project.
Iran has the advantage of being strategically located, with the potential to compete for markets in Europe, India and the Asia-Pacific region. This will be particularly important in the highly competitive global market. The continued support by Iran’s government, which is promoting LNG exportation, may enhance the country’s position in the global LNG market.
The existence of a well-developed gas market and its associated infrastructure inside the country provides the opportunity to deliver feed gas surplus to LNG plants and/or to secure back-up supplies for the plants in the event of upstream supply interruptions. This could be a crucial point, particularly in the early development of LNG projects, and represents a competitive advantage that the majority of competitors do not possess when initially establishing their own LNG business. ?
|
Download PDF
