Iran special: Could Tehran revive LNG export ambitions?

Spanish Market: Natural gas
11/06/21

The lifting of US sanctions would be one obstacle toppled, but the need to produce more gas to feed projects presents another hurdle, writes Antonio Peciccia

Iran has long harboured LNG export ambitions, as the holder of the world's second-largest natural gas reserves, but while the possible removal of US sanctions could lead Tehran to revive those plans, they would still face many challenges.

Previous LNG project plans stalled over the past decade because of the international sanctions related to Tehran's nuclear programme. TotalEnergies and Shell abandoned two projects, the 10mn t/yr Pars LNG and 16.2mn t/yr Persian LNG, respectively, as sanctions escalated at the beginning of the last decade. An attempt to revive these two projects under the management of state-owned oil company NIOC following the 2015 nuclear deal also ran adrift after the US administration of President Donald Trump abandoned the deal and reimposed sanctions in 2018.

Iran had also planned a third liquefaction project, the 10.8mn t/yr Iran LNG, and had agreed with Muscat on construction of a pipeline that would allow some Iranian gas to be used as feedgas for Oman's 10.4mn t/yr Qalhat liquefaction plant, but this project has also made little progress in recent years. Start-up of the Khazzan and Ghazeer tight gas fields off Oman freed up more gas from the country's onshore fields to feed Qalhat, leaving little capacity available to liquefy extra supply.

While Persian LNG and Pars LNG were still at early stages of development, preparations for installing Iran LNG's liquefaction trains had been largely completed by early 2017. But the reintroduction of US sanctions prevented German industrial engineering firm Linde from exporting equipment for the trains to Iran.

And reviving Iran's LNG ambitions would face a more fundamental challenge in the need to free up enough gas to feed a major liquefaction project. The country is the world's third-largest gas producer, but also its fourth-largest gas consumer — from output of 244bn m³ in 2019, 224bn m³ was used domestically, leaving just 20bn m³ available for export by pipeline, mainly to Turkey and Iraq. About 13.5bn m³/yr of extra production would be needed to feed the 10.5mn t/yr Iran LNG.

Long maritime coming

Iran has been striving to accelerate development of key upstream assets in recent months, awarding a number of contracts to domestic firms, including for the offshore Farzad-B gas field that straddles the maritime border with Saudi Arabia, which is expected to add around 10bn m³/yr of output. And in December 2020, NIOC subsidiary Petropars began drilling work at the long-delayed phase 11 of the supergiant offshore South Pars field in the Mideast Gulf, with the aim of producing 1bn ft³/d (10.3bn m³/yr). Oil minister Bijan Namdar Zanganeh said last August that Iran aims to have South Pars gas reaching onshore facilities within a year. Petropars took over the project after TotalEnergies, which led the consortium that won the contract for developing phase 11 in 2017, withdrew in August 2018 after failing to secure a sanctions waiver from the US.

The supergiant reservoir of South Pars is shared with Qatar, where it is known as the North Field — and Qatari state-owned QP this year sanctioned a $28.75bn investment in four new LNG production trains to boost capacity to 110mn t/yr by 2025 from 77mn t/yr. Further developments will add two more trains to hit 126mn t/yr by the end of 2027. Qatar's decision in 2017 to lift its 2005 moratorium on further North Field development made Iran's South Pars development a more pressing issue for Tehran, given concerns over the potential impact that Qatar's huge expansion project will have on South Pars' reservoir pressure. But while QP is already weighing partnership bids from leading international oil firms — including TotalEnergies — to take up to 30pc in the project, Iran will struggle to draw investment interest. Even before sanctions were reimposed in 2018, TotalEnergies' South Pars investment plans steered clear of any LNG project commitment.

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21/11/24

Cop: EU, four countries commit to 1.5°C climate plans

Baku, 21 November (Argus) — The EU, Canada, Mexico, Norway and Switzerland have committed to submit new national climate plans setting out "steep emission cuts", that are consistent with the global 1.5°C temperature increase limit sought by the Paris Agreement. The EU and four countries made the pledge at the UN Cop 29 climate summit in Baku, Azerbaijan today, and called on other nations to follow suit — particularly major economies. Countries are due to submit new climate plans — known as nationally determined contributions (NDCs) — covering 2035 goals to the UN climate body the UNFCCC by early next year. The EU, Canada, Mexico, Norway and Switzerland have not yet submitted their plans, but they will be aligned with a 1.5°C pathway, EU climate commissioner Wopke Hoekstra said today. The Paris climate agreement seeks to limit the global rise in temperature to "well below" 2°C and preferably to 1.5°C. Canada's NDC is being considered by the country's cabinet and will be submitted by the 10 February deadline, Canadian ambassador for climate change Catherine Stewart said today. Switzerland's new NDC will also be submitted by the deadline, the country's representative confirmed. Pamana's special representative for climate change Juan Carlos Monterrey Gomez also joined the press conference today. Panama, which is designated as carbon negative, submitted an updated NDC in June. It is planning to submit a nature pledge, Monterrey Gomez said. "It is time to streamline processes to get to real action", he added. The UK also backed the pledge. The UK announced an ambitious emissions reduction target last week. The UAE — which hosted Cop 28 last year — released a new NDC just ahead of Cop 29, while Brazil, host of next year's Cop 30, released its new NDC on 13 November during the summit. Thailand yesterday at Cop 29 communicated a new emissions reduction target . Indonesia last week said that it intends to submit its updated NDC ahead of the February deadline, with a plan placing a ceiling on emissions and covering all greenhouse gases as well as including the oil and gas sector. Colombia also indicated that its new climate plan will seek to address fossil fuels, but it will submit its NDC by June next year . By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

LNG diversions to Europe reach double digits

19/11/24

LNG diversions to Europe reach double digits

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Cop: Countries join fossil fuel subsidy phase-out group

19/11/24

Cop: Countries join fossil fuel subsidy phase-out group

Baku, 19 November (Argus) — Colombia, New Zealand and the UK today joined a Netherlands-led international coalition focused on phasing out incentives and subsidies for fossil fuels. They made the announcement at the UN Cop 29 climate summit in Baku, Azerbaijan. The coalition was first formed at Cop 28 in December last year. Member countries that sign up to the coalition commit to publish an inventory of their fossil fuel subsidies a year after joining, and to develop a plan to phase them out. Countries agreed at Cop 26, in 2021, to phase out inefficient fossil fuel subsidies, and reaffirmed this a year later at Cop 27. G20 members first pledged in 2009 to do the same. But global fossil fuel consumption subsidies hit over $1.2 trillion in 2022 and more than $600bn in 2023, IEA data show. "We truly feel that this is something we should tackle at a European level as well", EU energy commissioner Wopke Hoekstra said today. "This is something the next Commission will push; this is something I will personally push", he added. New Dutch climate and green growth minister Sophie Hermans admitted that phasing out fossil fuel subsidies is a "sensitive topic", but that the country is working on a plan. The first step is to make transparent which fossil fuels subsidies are in countries' systems, she said. The coalition now has 16 members — Austria, Antigua and Barbuda, Belgium, Canada, Costa Rica, Denmark, Finland, France, Ireland, Luxembourg, the Netherlands, Spain and Switzerland, as well as the three countries that joined today. Four members have made their national inventory of fossil fuel subsidies transparent — Belgium, France, Ireland and the Netherlands. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

G20 mayors call for $800bn/yr to address climate change

19/11/24

G20 mayors call for $800bn/yr to address climate change

Rio de Janeiro, 19 November (Argus) — Mayors from G20 countries are asking for at least $800bn/yr in investments by 2030 to tackle the effects of climate change. "We need better and faster access to international financing to ensure infrastructure that supports the socioeconomic security of our communities," Rio de Janeiro's mayor Eduardo Paes said. The joint statement from nearly 60 mayors and urban leaders was drafted during the Urban20, a G20 forum that includes leaders from major cities worldwide, and was delivered to Brazilian president Luiz Inacio Lula da Silva. The statement will also be delivered to other G20 members during the ongoing G20 summit in Rio de Janeiro. Climate change is one of the main topics being debated at the G20 summit. Brazil, which holds the G20 presidency this year, has set the energy transition as one of its goals for the year. The group reaffirmed its support for the Paris Agreement climate goals , saying it "fully subscribes" to the Cop 28 deal struck last year, which included language on transitioning away from fossil fuels. Urban investments such as low-emission transport, clean energy, and climate-resilient infrastructure can "significantly reduce emissions" and boost economic growth, according to the statement. The funding could unlock around $23.9 trillion in returns by 2050, it said. The $800bn/yr would cover around 20pc of urban climate finance needs and "serve as a catalyst for additional private sector funding," according to the Global Covenant of Mayors for Climate and Energy, a non-government organization for climate leadership that comprises over 13,000 cities worldwide. By Lucas Parolin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Brazil natural gas supplies diversifying

18/11/24

Brazil natural gas supplies diversifying

Rio de Janeiro, 18 November (Argus) — Supply in Brazil's growing natural gas market has diversified rapidly in recent months as domestic and international companies expand their foothold. Changes include a slew of new import authorizations granted by hydrocarbons regulator ANP in recent months. Last week alone, ANP authorizated up to 1.7mn m³/d of LNG imports, the 12th approval of the year, allowing as much as 3.8bn m³/yr (10.4mn m³/d) of LNG to reach Brazilian shores. US-based New Fortress Energy has led the pack, signing a bevy of new supply agreements from its regasification terminals in Barcarena port in northern Para state and the Terminal Gas Sul (TGS) in southern Santa Catarina state. New Fortress said it signed more than 45 trillion Btu/yr (860,000 t/yr) of downstream supply commitments across 15 buyers, with an average contract length of 18 years. The terminals emerged as important new destinations this year, with the Para terminal claming 2.2pc market share from January-October and the Santa Catarina terminal capturing about 0.5pc. On 8 November, ANP authorized New Fortress to import up to 1.7mn m³/d of LNG to be distributed by pipeline and small-scale means. It holds a 15mn m³/d import authorization for Barcarena and one for 146,000 m³/d of LNG from Bolivia by truck. Gas trading company Edge has also expanded LNG supply to Brazil. It began operating its TRSP regasification terminal in Sao Paulo earlier this year, catapulting Sao Paulo to a 6pc of share of Brazilian LNG imports in the first nine months of 2024 by selling nearly 1.27mn m³/d of gas. Edge sold 27mn m³ of gas to industrial clients from the terminal on the wholesale market in the third quarter. Shell is also looking to expand its Brazilian gas sales amid growing expectations of a boom in supply from its Vaca Muerta shale reserves in neighboring Argentina. Earlier this month it won authorization to import up to 8mn m³/d of gas by pipeline from Argentina and Bolivia. Shell is also assessing LNG exports from Argentina, which could include sales to Brazil. Shell is also planning to expand LNG imports through the Suape port in Pernambuco state next year. OnCorp expects to begin operating the 14mn m³/d LNG regasification terminal in the port, which Shell will use to supply clients in the region, including gas distributor Copergas. Other companies including Gas Bridge and Blueship are also eyeing LNG imports. Blueship is authorized to import through the port of Navegantes, in Santa Catarina, while Gas Bridge can import through state-controlled Petrobras' terminal in northeastern Bahia state. By Betina Moura Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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