As a late comer in the field, Iran is lagging behind in many aspects of the sector and there is no quick fix along this path which will require a lot of patience and perseverance.

Technology

Unlike railway tracks and gas pipelines, LNG requires very sophisticated technology. Today only some Western energy MNCs have mastered this technology. To transfer the know-how to develop the domestic LNG technologies we need to establish contacts with foreign science-based firms.

LNG is a type of cryogenic fuel which requires storage at extremely low temperatures in order to maintain it in liquid form. It is used in machinery that operates in space (e.g. rocketships and satellites), where traditional fuels cannot be used due to lack of atmosphere.

LNG was used by Russian aircraft manufacturer Tupolev Tu-154 model for the first flight in 1989. However the LNG industry in Russia is still at its infancy, with only one operational large LNG plant, Sakhalin-II. Project’s ownership: 50 percent Gazprom, 27.5 percent Royal Dutch Shell subsidiary, 12.5 percent Mitsui and 10% Mitsubishi subsidiary. Russia’s Yamal LNG plant in the North Pole is still under construction in partnership with Total. It is expected to come online in 2017.

By 2030 Russia aims to capitalize on 20 percent of the global LNG share. To do that they need information, experience and technological know-how. Moscow will host the third LNG Congress Russia 2016 from March 16-18. The forum will be attended by key industry leaders..

Cryogenic fuels are also environmentally cleaner than gasoline or other fossil fuels. Using LNG for transportation can reduce greenhouse gas rate by 11-20 percent. Moreover, LNG is non-pollutant, so if spilled it will evaporate and not contaminate the environment..

Today the trend of natural gas transportation and storage is moving towards LNG tankers and terminals.

Iran’s quest.

Iran’s had aimed to start exporting LNG at least 10 years ago. However, the program has been hampered by sanctions and mismanagement.

Now, that the sanctions’ removal is just a matter of weeks, there is a lot of catching up to do if the ambitions of LNG technology are to be realized. What’s important is that the government of President Hassan Rouhani is not sitting idle. Some preliminary steps have been taken in this long arduous road.

For starters Shana news agency reported on December six that Iran has established an LNG research institute in a bid to join the elite club of LNG producers. Vice President for Scientific and Research Affairs, Ali Vatani, will chair the LNG research institute, which will act as a bridge to connect university academia with the industry.

‘We have plans to establish a mini LNG pilot with the science and technology department in the Presidential Office which marks the birth of a specialized research institute in the field of LNG,” said NIGC Director of Research and Technology, Saeid Pakseresht.

Earlier in November the media reported Petroleum Minister Bijan Zanganeh was in discussion with the Belgian Secretary of State for Foreign Trade Pieter De Crem regarding partnership with Belgium’s Exmar to provide Iran with its first Floating LNG (FLNG) barge in Kharg Island.

In a related development Deputy Petroleum Minister Roknoddin Javadi informed that Iranian companies and a French firm have reached a final agreement on floating production of LNG.

The companies will form a consortium to build the Middle East’s first FLNG plant with a capacity to produce 1 million tons of LNG a year. The feedstock for the plant will come from gas currently being burnt, a process called flaring, at the Forouzan oil field which Iran shares with Saudi Arabia.

This would mark the first time in Iran for utilization of natural gas associated with oil production, instead of flaring it . The associated gas will be piped from the Forouzan field to an LNG facility on Kharg Island. The projected is expected to come online in two years.

Foreign companies are weighing $800 to one-billion-dollar investment to convert 200 mcf of associated gas to LNG a day, head of investment at NIOC, Ali Kardor said last month.

In another case of LNG technology development, NIGC Managing Director Hamid-Reza Araqi noted that an LNG liquefaction project is underway with 60 percent physical progress, expressing hope the project will be launched in the next one and a half years.

Iran expects to bring five LNG projects online in three years, including the above-mentioned liquefaction project. Royal Dutch Shell, Spain’s Repsol, and France’s Total abandoned three LNG projects in 2011 due to sanctions, banning supply of equipments, including high tech liquefaction articles. The removal of sanctions, expected in mid January, could breed new life into these projects.

During the Iran Petroleum Conference (IPC), held in Tehran Nov. 28-29, gas projects worth $185b were up for grab. The projects encompass a total of 226 trillion cubic standard feet (tcsf), which accounts for 19.1 percent of the country’s total gas reserves.

In February a follow-up conference on IPC will be held in London. Transfer of technology is among the clauses mentioned explicitly in IPCs.

Just acquiring LNG technology is not enough to reach the goal of becoming a major gas hub in the world. The production needs to keep pace with domestic consumption, the consumption itself has to be reduced by raising public awareness and increasing efficiency at power stations and distribution grids, auto industry, real estate, etc.

Iran exports natural gas to three neighboring countries including Azerbaijan Republic, Armenia and Turkey and will start exports to Iraq in the near future.

With the development of LNG technology Iran will not be confined to the neighboring countries only. With the Persian Gulf waterway it has access to all the markets in Asia without the need to lay railway tracks or gas pipelines.