News ID: 193082
Published: 0718 GMT May 19, 2017

Portuguese official optimistic about EU-Iran gas deal

Portuguese official optimistic about EU-Iran gas deal

Iran has invested in Sines port to operate the LPG shipments with Portugal, Ruben Eiras, an advisor in Portugal's Ministry of Sea told Trend News Agency.

According to the official, Iran and Portugal are more than hopeful about the future cooperation. "At the moment, there is an Iranian investment in the port of Sines to commercialize LPG shipments. It is part of market dynamics. And specifically, they are focusing on infrastructures to distribute LPG in African market," he said.

Coming to natural gas deal between Iran and EU, Eiras said that he is optimistic about Iran–Europe gas relations. "For what I know, if there is will and investment capacity, this will lead to other cooperation as well," he said.

Iran is expanding its LPG and gas condensate markets due to output growth in South Pars. Iran increased hydrocarbons production capacity from South Pars by nine percent during the last fiscal year. Daily gas output from the field currently stands at 500 million cubic meters (mcm/d), gas condensate at 560,000 barrels per day and LPG (butane and propane) at about 25,000 tons.

Iran's LPG production was 5.6 million tons per year in 2014 and reached about nine million tons in early 2017.

During the last fiscal year (ended March 20), Iran exported propane valued at $1.222 billion at $350/tons as well as butane worth $772 million at $377/tons.

Iran also has announced repeatedly about its willingness to export natural gas (methane) to Europe via pipeline or LNG. Iran has a semi-finished LNG plant, suspended mid-2000s due to sanctions, but hasn't re-launched the plant yet. The capacity of the project is 10.4 million tons of LNG per year. The cost of the project was $2.5 billion but it requires a further $5.5b-$9.5b for completion.

Iran will also have to construct a $6-billion 1,800-km pipeline stretching from South Pars to the border with Turkey. Then it may be able to supply gas to the Trans-Anatolian Natural Gas Pipeline, connected to Trans Adriatic Pipeline in Europe in case the shareholders of projects give the green light.

Both pipelines are Turkish-European part of Southern Gas Corridor, aimed to transit 16 bcm/year of Azerbaijani gas from Shah Deniz to Turkey and Europe in 2018 and 2021 respectively. The final capacity of the project is 31 bcm/year.

Iran's gross gas output stands at 285bn m3/yr. However, it plans to raise this to about 440 bcm/year by 2021 following the full operational of South Pars and the start of gas production from other projects such as Kish gas field.

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