Iran’s gas supply outlook post-sanctions

Lifting the sanctions means Iran can develop its natural gas resources at a faster pace. Iran is a rich country in terms of holding gas resources. It can easily add 7-8 bscf/d of gas, mainly from South Pars over the next 5-6 years. A major part of this gas can be exported by pipeline to the neighboring countries; Iran has the potential to export an additional 3-4 bscf/d of gas by pipeline to the regional markets. This potential gas exports by pipeline would be equivalent to some 20-30 mmtpa of LNG for the country. Iran has reached a conclusion that the LNG business is challenging and the country will face strong competition from several new players in the future. Therefore, LNG exports are no longer on the priority list for the country. The pipeline export especially to the neighboring countries is the cornerstone of Iran’s gas export policy. There are also other ambitious pipeline export projects under discussion such as gas exports to Europe, and/or to India via a deep underwater pipeline, as well as gas exports to China (via Pakistan). These projects may have slim chance to materialize in the foreseeable future, not just because of logistics, but because they are not viable options economically.