Iran: gas plans progress but exports a distant prospect

Iran is set to the be the largest driver of gas production gains in the MENA region in 2015-2021, with the IEA expecting annual output to rise 29bcm to 199bcm. But with demand set to rise 26 bcm to 195 bcm, the impact on global gas markets will be minimal.

While Iran has a number of mooted gas export plans, satisfying the domestic market is the government’s key priority. Although the easing of international sanctions is reinvigorating Iran’s crude oil production and exports (see p12) the impact on gas is primarily set to be felt on the demand side.

As Iran seeks to boost its ailing economy through increased external trade, it is aiming to boost its manufacturing base and this will increase electricity demand. Demand growth was already strong prior to the January easing of sanctions. Iranian power generators burned a record 58 bcm of gas in the Iranian year to 19 March 2016, up 15% from the previous year and demand growth is set to remain strong (MEES, 8 April). (CONTINUED - 414 WORDS)