Energy Sector - 2

[Naresh]

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[url="http://www.thenews.com.pk/daily_detail.asp?id=255375"]Iran drops LNG project under energy policy review [/url]



TEHRAN: Iran is abandoning a project to produce liquefied natural gas as part of a policy review that will see Tehran focusing more on exporting gas through pipelines, a top oil official has said.



“The oil ministry is currently focusing on gas exports by pipelines,” Ahmad Ghalebani, managing director of the National Iranian Oil Company, told the oil ministry’s news agency Shana on Friday.



The announcement comes as several top global energy majors have either quit or are considering an exit from Iran, which holds the world’s second-largest natural gas reserves but which world powers slapped with new UN sanctions in June over its controversial nuclear programme.



As part of the shift towards piped gas exports, Iran is abandoning Persian LNG, a project which was previously to be executed by Shell, the Anglo-Dutch energy major which had been awarded a gas block in the giant South Pars field.



Shell quit the project ahead of the fourth round of UN sanctions agreed to in June.



The Persian LNG project had faced several roadblocks even before the latest sanctions, along with another project, Pars LNG, led by French firm Total, which is also in the process of withdrawing from Iran.



A third LNG project, led by the National Gas Company using German technology, is a little more advanced with Iran having already invested over one billion dollars.



Ghalebani said the LNG policy review does not abandon LNG projects totally as they could become “economical” in the long term.



“Considering the long borders and good relations we have with our neighbours and the vast pipeline network in the country, there is an advantage to exporting gas (through pipelines) than (producing and exporting) LNG,” he said.



“(Piped) gas exports are cheaper and can be done faster, while exports of LNG not only require huge investments and complicated technology but are also time consuming.”



He said Iran will need to undertake further studies in the LNG sector.



“We must also study additional investment needs and return of capital in this area,” Ghalebani added.



“That does not mean we will put aside the LNG projects. But we will review them.”



Following the latest round of UN sanctions, the United States and the European Union have put further pressure on Iran by imposing unilateral sanctions specifically targeting the country’s vital energy sector.



The development of South Pars, which holds about eight percent of world gas reserves, has lagged due to a lack of technology and investment, even as Iranian officials claim that local companies have replaced international firms.



Shared with the small state of Qatar, the South Pars field holds around 14 trillion cubic metres (500 trillion cubic feet) of gas.



But despite its vast reserves, OPEC’s second largest oil exporter still faces severe gas needs of its own.



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