December 16, 2022
Oil Minister Javad Oji says the Islamic Republic cannot produce enough natural gas this winter to fulfill all its needs, meaning some homes in the country are likely to go unheated.
But just six days later, the Oil Ministry’s news service said Iran was discussing with Turkiyeh the renewal of its 25-year gas supply contract in 2026 with a provision for Turkiyeh to buy even more gas from Iran.
In the long run, Oji said October 18, Iran needs some $80 billion in domestic and foreign investment to avoid natural gas shortages in winters.
He warned that the country would face a 200-million cubic meter daily shortage of natural gas this winter. Last winter, Iran produced 705 cubic meters of gas nationally each day.
Addressing the Majlis, he said the $80 billion in investment funds is needed “upstream and downstream to resolve the issue within the next three to four years,” but, without foreign investment, that amount is unreachable.
Six days later, Shana, the Oil Ministry’s news service, said Iran and Turkiyeh started discussions on renewing Turkiyeh’s contract to buy Iranian gas. The contract expires in 2026. Since 2001, Iran has been obligated to provide Turkiyeh with up to 10 billion cubic meters of natural gas each year. But Iran has often curtailed supplies in winter when Iran was short of its needs.
The head of the Dispatching Department of the National Iranian Gas Co., Mohammad-Reza Julai, said one topic of the talks was an increase in Iranian gas exports to Turkiyeh. But Hamid-Reza Araqi, a former CEO of the National Iranian Gas Co., said growing gas demand from Iranian customers would make it difficult for Iran to export any more gas to Turkiyeh.
Iran needs to develop its oil and gas sectors with technology that is available only from Western energy firms to boost production, which is gradually falling. As natural pressure in the South Pars gasfield is dropping, Tehran needs billions to build larger platforms to extract more gas.
More than 70 percent of Iran’s energy is supplied by natural gas and the South Pars field is responsible for around 75 percent of this amount, the oil minister said, underlining that the lack of investment to develop gasfields is the main cause of this shortage.
Iranian officials and government-controlled media were claiming in August and September that as winter approaches in Europe the West would need Iran’s energy and might make more concessions in the nuclear talks.
Iran has the second largest natural gas reserves in the world, holding more than 17 percent of the gas discovered globally. However, without foreign investment and technology, it will become a natural gas importer, while the US sanctions do not allow Western companies to have any business dealings with the country. Iran is understood to be talking to Moscow about possibly buying gas from Russia.