Iran is reportedly planning to pump in excess of $120bn into projects to produce 80 million tonnes of LNG within 12 years and become the world’s largest LNG exporter, an Iranian gas official is believed to have said.
Iran does not currently have LNG industries, although it controls the world’s second largest natural gas resources after Russia, estimated at 27.5 trillion cubic metres - more than 15% of the total global gas reserves.
The delay in setting up such industries is due to the country’s focus on upstream oil and gas development to meet domestic demand. Another factor is that Iran has been suffering from a severe shortage of funds, technology and equipment due to sanctions from the US and other Western nations.
Ali Kheirandish, Managing Director of the government-controlled Iran LNG Company, indicated his country had already secured nearly $5bn in bank finance and would not have any problem getting more funds.
In an interview with Emirates Business, Kheirandish said his company would pump more than half the country’s targeted output and it has already secured enough markets in Asia and Europe for its products.
“Our forecast is to produce 80 million tonnes of LNG by 2020. We could increase the level after that period but it will depend on the market and other conditions,$quot; he said at a Middle East project finance conference in Abu Dhabi.
“Of course, these projects will attract huge investments. Our estimates are that costs in current prices are in excess of $120bn. I can assure you that we do not have any problem or difficulty in fixing finance for our projects because of the very good return and advantages from these projects. Many financers have come to us with very attractive offers and we expect a lot more banks to make offers,” Kheirandish said.
Kheirandish noted that Iran LNG, which is 51% owned by the National Iranian Oil Company, had already embarked on a major project at Asitenear Tombak, nearly 60km from Assaluyeh in Bushehr province. He said the project comprises two liquefaction trains with an output capacity of 5.4 million tonnes of LNG per year.
Nearly 70% of the LNG production would be sold in Asia and Europe under long-term supply contracts, while the rest would be sold on the spot market.