News & Reports News Year 2011 May , 2011 Iran LNG set to start exporting fuel next year

Iran LNG set to start exporting fuel next year

6-24ordibhesht

Iran Liquefied Natural Gas Co., the country’s maiden LNG project, says it's poised to begin exporting by the end of next year after tapping domestic funds to beat international sanctions.

The company, 49 percent owned by the government, aims to process LNG and ship it from a terminal to be built between the southern port towns of Assaluyeh and Kangan using foreign technology and cash from Iranian banks and investors.
“On the path we’re on now, we don’t have investment needs or technological needs,” Managing Director Ali Kheir-Andish said in Tehran. “It’s a challenging objective, but we are making all the efforts towards meeting this target.” Iran holds 16 percent of global gas reserves and is the world’s fourth-largest producer after the U.S., Russia and Canada, according to data from BP Plc.

While it's building or planning pipelines to export gas to regional neighbors such as Pakistan, India and Syria, the country wants also to develop the ability to produce the fuel in liquefied form for easier transportation to more distant markets. Iran had aimed to start exporting LNG five years ago, if not earlier.

Indian Oil Corp., a state-run refiner in India, discussed purchasing LNG as early as 2006. Zhuhai Zhenrong Co. of China agreed with state-run National Iranian Oil Co. to buy fuel starting in 2008. “Of course it is our ambition to be a top exporter, but that has to be in line with preserving our national interest and standing,” Kheir-Andish said on April 10.

“We’re not going to make our people miserable and give nothing to local companies in order to export all the gas. Iran has lots of use for the gas domestically.” “Domestic banks have become partners in providing the investment needed,” Kheir-Andish said. Iran LNG has cost some $1.5 billion so far and will need a total investment of almost $5 billion upon completion, he said.

The company has secured the technologies it needs through contracts with foreigners, including companies in Europe, the executive said. “We have the technology needed at our disposal,” he said. “We concluded the contracts, and these are being executed.” Iran LNG is based in Iran’s southern Bushehr province in the Pars II special economic zone.

The gas it wants to chill into a liquid would come from South Pars, which together with the adjacent North Field in Qatar comprises the largest known gas deposit in the world. Iran LNG expects to produce 8 million tons of the fuel in its first year of operation and foresees potential annual output of 10.8 million tons, Kheir-Andish said.