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Iran to supply India’s gas needs at the most competitive cost: NIOC
Iran as the world’s second largest gas reserves holder, is capable to provide India’s gas needs at the most competitive cost.
“Iran as the world’s second largest gas reserves holder, is capable to provide India’s gas needs at the most competitive cost,” Mostafa Sharif , General Manager of Gas Marketing at National Iranian Oil Co. (NIOC) said at the dmg-organised Asian Gas Summit held Thursday in Singapore.
Iran holds 18% of the global gas reserves or 33.3 TCM. As the country’s gas reserves and production have had sustainable growth since 1997, there is no doubt that Iran has sufficient gas resources to satisfy its domestic usage, enhancements oil recovery and export, Sharif remarked. “Since 98% of Iran’s domestic demand is already met with current production, additional 400 MMCM/D of gas will be available for export in the near future.”

“NIOC can supply India with Iranian gas via the proposed Iran-India deepwater gas pipeline project,” Sharif told the summit’s audiences, added that the cost of gas export by this pipeline in comparison to the other suppliers is very promising as it is one/third of the US LNG cost.
India plans to promote gas in the country as part of its strategy to double the share of gas in its energy mix to around 15% in the next 4-5 years.

Meanwhile, Sharif has noted that the market players should be cautioned about emerging markets’ developments. “Demand from several emerging LNG markets has risen sharply this year and market players see and expect more LNG demand from these markets in Asia, Americas and Africa. However, they should be cautioned that some of the forecasts of emerging markets’ LNG demand underestimate high level of related risks and particularly price elasticity of demand (PED) in these markets.”
Most of the emerging markets, given their low creditworthy, couldn’t be considered as foundation buyers for new LNG export projects. LNG producers which their facilities are mostly depreciated and have paid off their loans can accept more flexibility and risks required for trading with low demand and low creditworthy clients. However, these conditions would not be acceptable for new Greenfield projects which need to be financed by the banks, Sharif has reminded.
He has also argued that shorter term contracts, does not signal the end of the long-term contracts market. “Gas & LNG industry has been built on these long-term contracts that are good for buyers and sellers as they offer certainty of supply and predictability of pricing, which underpins investments. Market trends support this idea as at least 15 long-term LNG SPAs have been signed so far in 2018, with a total volume of more than 25 MMT/Y.”

Source(s) GLNGI Staff, Image courtesy of NIOC