NIGC Confirms Interest of France’s Total, Technip
National Iranian Gas Company (NIGC) chief has said that France-based firms are considering investments in Iran.
Hamid-Reza Araqi said the French companies expressed their interest in Iran during meetings on the sidelines of the recent World Gas Conference in Paris.
On the sidelines of the World Gas Conference in Paris, the chief executives of 15 French companies including Total, Technip, Schneider and Vinci Energy held direct talks with Araqi to discuss opportunities in Iran.
Araqi also met with France’s MEDEF which brings together French entrepreneurs.
“These companies voiced their readiness for presence and investment in Iran and contribution to a variety of projects in Iran’s gas industry,” he said.
Araqi said he also met with France’s MEDEF which brings together French entrepreneurs.
MEDEF comprises 100 big French companies including Total, Airbus, banks and investment companies involved in energy, power transmission, refinery construction, oil and gas storage and other sectors of oil and gas industries.
Araqi said NIGC offered 18 major projects for investment in Paris. They included Iran Gas Trunklines IX and XI and the completion of IGAT VII and storage projects.
He said that Iran’s presence received rapturous welcome at the World Gas Conference, adding that different ways of investment including build-operate-own (BOO), build-operate-transfer (BOT) and foreign direct investment (FDI) were discussed.
Foreign oil and gas companies are waiting for the easing of sanctions on Iran under a long-awaited nuclear deal between Tehran and six world powers.
The World Gas Conference (WGC) is the most important event of the International Gas Union (IGU) triennium. The three year period between each event generates strong expectations.
The role of natural gas is increasing in the global energy mix, now presenting a great opportunity for growing economies which are faced with the big challenge of fuelling development in an environmentally sustainable way.
IGU is a worldwide non-profit organization aimed at promoting the political, technical and economic progress of the gas industry.
London Clear Message to Iran Oil
Officials and experts have regularly attended the World National Oil Companies Congress in London. But this time, the congress was held amid intensive negotiations between Iran and six world powers with a view to reaching a comprehensive nuclear deal.
Participants in the congress expressed hope that international sanctions on Iran would be lifted to facilitate investment in the oil and gas-rich country.
During the two-day event, more than 30 oil officials, experts and representatives of international oil companies exchanged views on achievements as well as strategic challenges to the petroleum industry.
But the most important discussions were held about Iran on the sidelines of the congress.
Paul Stones of the Chatham House Royal Institute of International Affairs said international oil companies are willing to return to Iran. He said that Iran’s market would become more attractive in case Iran manages to revise its oil contracts.
He said Iran’s law does not allow production sharing agreement (PSA) for implementation of oil and gas projects.
He added that this problem could be resolved by making amendments to terms and conditions in oil contracts to become internationally attractive.
Simon Telling, Operations Director at RPS Energy, said foreign companies will flood Iran as soon as the sanctions are lifted.
He said that many foreign companies are willing to do business in Iran, adding that they are so eager to return, as Iran has been closed to them for a long time.
Chris Cook, researcher at University College London, said Iranians have been highly flexible vis-à-vis challenges and problems.
He said Iranians managed to restructure their economy during years of sanctions, adding that Arab countries would not have been able to go the same way had they been under pressure alike by the West.
Foreigners Seek IPC Clarification in Tehran
A group of foreign companies have travelled to Tehran to gather more detailed information about Iran’s new model of oil contracts, a senior official said.
Mehdi Hosseini, head of a petroleum ministry committee tasked with revising oil contracts, said top European companies have come to Tehran for discussion about Iran Petroleum Contract (IPC).
“The talks between Iran and European companies are focused on expertise, regardless of political issues,” he said. “In these meetings, the foreign parties demanded more clarification on the new model of Iran oil contracts, and the Iranian team responds to their questions and clarifies ambiguities.”
Hosseini said “constructive” expert-level talks have already been held with Asian companies about investment in Iran after the end of sanctions.
The presidential office is examining the draft of IPC which is designed to tempt foreign companies back.
IPC is expected to replace “buy-back” contracts which, he added, are no longer attractive to foreign companies.
Under a buyback deal, the host government agrees to pay the contractor an agreed price for all volumes of hydrocarbons the contractor produces.
But under the IPC, National Iranian Oil Company will set up joint ventures for crude oil and gas production with international companies which will be paid with a share of the output.
Foreign companies are expected to rush back to Iran as hopes soar for relief in sanctions imposed on the Islamic Republic over its nuclear program.
Iran Woos 170 Companies for Gas Export
Iran’s state-run gas company held talks with 170 foreign companies last calendar year for gas exports, the head of the company said.
Ali-Reza Kameli, head of National Iranian Gas Exports Company, said the last calendar year, which started on March 21, was the first year Iran witnessed a positive gas balance.
He said that Iran’s gas production is to continue over the coming three years to reach 1 bcm/d in 2019. Then, he added, Iran would be able to export gas.
Iran holds 34 tcm of gas, which makes the country the largest holder of gas in the world, Kameli said.
He said Iran’s priority for gas exports are neighbors like Turkmenistan, Armenia, Azerbaijan, Turkey and Iraq.
“In the meantime, talks have been held with other Persian Gulf countries like the United Arab Emirates, Kuwait, Bahrain and Oman,” he said.
Kameli said negations over gas contracts are often lengthy.
He also said that talks are under way for Iran to export liquefied natural gas (LNG). He said that two major LNG projects – Pars LNG and Persian LNG – came to a halt due to international sanctions.
“But Iran LNG project is 50% complete and we are waiting for sanctions relief to import the required equipment and installations for this project,” said Kameli.
LNG makes up a 31% share in world gas trade, 70% of which is in Asia and Middle East.
“Entry into LNG industry and LNG market means access to farther markets which could not be accessed via pipeline,” he said.
Kameli said there are currently 60 LNG terminals in Asia, waiting to receive the supercooled product.
“This means that the world and particularly Asian countries are preparing to supply their needs through LNG. Naturally, Iran should be prepared for this growth in demand,” he said.
“Iran will be able to export gas to Persian Gulf littoral states by building a maximum 200-kilometer pipeline. Naturally, these countries are Iran’s top priority for gas exports due to further interests, shorter time and lower costs,” said Kameli.
He said that access to Europe’s gas market would need at least 4,000 kilometers of pipeline, which costs too much and takes long.
“But it does not mean that we do not eye the European market. We hold a long-term look at this market and we hope to be able to access Europe’s market through LNG,” said Kameli.
Major portion of Iran’s gas is accumulated in the giant offshore South Par gas field. South Pars, divided into 29 development phases, holds 40 tcm of natural gas, or 21% of world’s total gas reserves, and 50 billion barrels of condensate.
South Pars covers an area of 9,700 square kilometers, 3,700 square kilometers of which is in Iran’s territorial waters in the Persian Gulf. The remaining 6,000 square kilometers is situated in Qatar’s territorial waters.
The gas field is estimated to contain a significant amount of natural gas, accounting for about eight percent of the world’s reserves, as well as approximately 18 billion barrels of condensate.