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    Greater Caspian Region Weekly Overview: September 27th




by: Ilham

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Weekly Overviews, Trans-Adriatic Pipeline (TAP) , News By Country, Azerbaijan, Turkmenistan, Iran, Kyrgyzstan , Caspian Focus

Greater Caspian Region Weekly Overview: September 27th


Iran starts $1.8 B gas grid project in Pakistan 

Iran started expanding a $1.8 billion gas network in Pakistan's southeastern region: Sistan and Paluchestan Province.

Hassan Montazer Torbati, the planning director at the National Iranian Gas Company (NIGC) announced on September 27th that the 260 km pipeline grid would be constructed and connected to the 7th cross-country pipeline.

7th cross- country pipeline, stretching from South Pars gas field to its borders with Pakistan is planned to deliver Iranian gas to Pakistan (and India), alongside supplying gas to southeastern regions.

According to the report, some 300,000 households in Sistan and Baluchestan Province would be supplied with gas by commencing this project.

Iran has a $4.5 billion worth in projects, which will add an additional 3 million households to the gas network.

The gas grid also would deliver gas to power plants in Iranshahr, Zahedan cities, as well as Chabahr port.

Pakistan is expected to receive Iranian gas by 2017, with a two year delay based on agreement due to postponed the development plan of pipeline because of sanctions.

Iran drills 92 oil and gas wells in 6 months

Iran has drilled 92 oil and gas wells during the first half of current fiscal year, commencing March 21st.

During the mentioned period, 56 wells in the fields, operated by National Iranian South Oil Company, 16 wells in fields operated by Petroleum Engineering and Development Company, 6 wells in fields operated by Iranian Central Oil Fields Company and 3 wells in other fields, reported Shana on September 26th.

In total, 13 more wells were drilled compared to the same period in last year.

Iran drilled 160,663 meters of oil and gas wells in the first half of current fiscal year.

Details of Iran’s gas consumption announced

Iran has delivered 35.87 billion cubic meters (bcm) of gas to power plants during the first half of current fiscal year, 4.87 bcm more than the same period in last year.

Some 17.286 bcm of gas was consumed at industrial sector, while the housing sector used about 28 bcm of natural gas during the mentioned period, Shana reported on September 26th.

More than 81 bcm of gas was consumed in first half of year, but it’s expected Iran’s gas consumption to increase significantly in the second half of year due to cold seasons. Gas demand in Iran’s housing sector triples in winters. 

Iranian gas expected to reach Oman in 2.5 years

Iranian gas is expected to deliver to Oman in 2.5 years, Alireza Kameli, managing director of the NIGEC said on September 23th.

According to him,  Iranian Offshore Engineering and Construction Company is negotiating with an Omani company to evaluate their might to start laying pipelines in land and water.

“About 11 months is needed to study the project, while some 18 to 30 months is required to construct both onshore and offshore sectors of Iran-Oman pipeline”.

In March 2014, Iran and Oman signed a memorandum of understanding under which Iran will supply Oman with 10 billion cubic meters of natural gas per year in a 25-year deal.

The 260-km subsea pipeline is expected to cost $1 billion.

In a meeting between Iranian Oil Minister Bijan Namdar Zanganeh and Oman’s Minister of Oil and Gas Mohammed Al Rumhy in Tehran on September 22th, the two sides stressed expediting implementation of this project.

India ready to invest over $15 billion in Iran; seeks cheaper gas

India is ready to invest more than $15.2 billion to build projects in Iran including taking up full-scale development of Chabahar Port if Tehran offers better terms including cheaper gas, Shipping Minister Nitin Gadkari said on September 23th.

"We are ready to make a huge investment in Iran and this is mainly linked to gas pricing offered by Iran ... Gas price is a crucial issue," Gadkari told a news conference, Reuters reported.

With the easing of sanctions New Delhi is hoping for a greater and stronger role in Iran's development by taking up projects including building urea and petrochemical projects using gas produced in the OPEC-member nation.

India is seeking gas at $1.50 per million British thermal units (mmBtu) compared to $2.95 offered by Iran for building a urea plant there, Gadkari said.

He said building a plant in Iran and importing urea from there to India will help save a part of the 800 billion rupees ($12.13 billion) in subsidies and halve the prices for farmers.

"If the gas price is reasonable then all departments in India can together take up projects in the special economic zone there and investment will be more than 1 trillion rupees," he said.

Iran is studying India's proposal for development of the Iranian Farzad B offshore gas field, Rokneddin Javadi, the managing director of the National Iranian Oil Company said on September 22th.

The parties have been negotiating the issue for a long time, Javadi said, adding, recently the Indian side has offered a new proposal which is under study.

Javadi further said that excluding the Farzad B field, no negotiations are underway about the other gas field projects Iran’s Fars news agency reported Sept. 18.

According to Indian media, India’s ONGC Videsh Ltd (OVL), which is the overseas arm of the state-owned Oil and Natural Gas Corp, has offered a proposal worth $10 billion for development of Iran's Farzad B offshore gas field.

 ($1 = 65.9500 rupees)


SOCAR, Snam sign MoU

State Oil Company of Azerbaijan (SOCAR) and the Italian company Snam signed a memorandum of cooperation to assess the initiatives put forward for the development of the Southern Gas Corridor in Baku September 23th.

The sides discussed the possibility of exchanging the experience between SOCAR and Snam in the fields of construction and operation of the equipment necessary for the transportation of natural gas from Azerbaijan and other countries to the European markets through the Italian infrastructure to ensure energy security of Europe.

The Southern Gas Corridor project is estimated at $45 billion and is expected to transport Shah Deniz Stage 2’s gas to Europe by 2021.

Turkey consumed 55% of Azeri Shah Deniz gas

The volume of gas extracted from Shah Deniz field in Azerbaijan reached 64 billion cubic meters from the commencing date of this project to September 1, 2015.

Azerbaijan commenced Shah Deniz Stage 1 (SD1) on July 3, 2007. Since this period, 4.7 billion cubic meter of gas (bcm) has been exported to Georgia, 35.4 bcm delivered to Turkey and 24 bcm consumed domestically.

Last year, Azerbaijan produced 9.9 bcm of gas from SD1. In the first half of the 2015, natural gas production from this field stood at 5.2 bcm, some 0.45 bcm more than the same period in the last year.

Over the summer, Azerbaijan exported 18.5 million cubic meter per day (mcm/d)of total produced 27 mcm/d gas from SD1 to Turkish market, while 2.5 mcm/d of gas was delivered to Georgia.


Large gas-to-liquids plant to be constructed in Turkmenistan

A large plant for producing liquid fuel from natural gas (GTL) will be constructed in Derweze district of Turkmenistan’s Ahal province, said the message from the country’s Ministry of Oil and Gas Industry and Mineral Resources.

The new plant will process 3.5 billion cubic meters of natural gas and produce 1.691 million tons of liquid fuel per year, according to the message, Trend reported on September 21th.

During a government meeting, Turkmenistan’s President Gurbanguly Berdimuhammadov pointed out that creating such enterprises is a key vector of further diversification of the country’s fuel and energy industry, according to the ministry.

“Development of the gas chemical complex is aimed at increasing the volume of high-quality gas processing products and increasing their share in the export to world markets,” said the ministry.

Thus, the priority of Turkmenistan’s energy strategy will be the export of finished products from deep processing of natural gas based on the latest achievements of scientific and technical progress, technical re-equipment of the facilities of petrochemical industry and construction of new gas and oil refineries.


Construction of Kyrgyzstan's section of Turkmenistan-China gas pipeline to start in 2016

Kyrgyzstan will earn up to $80 million annually from transit of the Turkmen gas to China, Prime Minister of the republic Temir Sariyev said at a meeting with Kyrgyz businessmen on September 21th.

"The construction of a new gas pipeline from Turkmenistan to China with the capacity of 30 bcm/a of gas will start next year. We expect to earn $40 million to $50 million annually from transit fees in the nearest 3-4 years and this figure would gradually increase up to $80 million”.

On December 30, 2013 the Kyrgyz Republic ratified the agreement between the Government of Kyrgyzstan and China on cooperation in construction and operation of the pipeline "Kyrgyzstan-China", signed on 11 September 2013.

The agreement provides for the construction of the fourth gas pipeline from Turkmenistan to China with the capacity of 30 bcm/a, the length of the territory of Kyrgyzstan is about 215 km.

The volume of investment only on the territory of Kyrgyzstan is $1.2 to 1.4 billion. The project implementation period is 3 years.