Azernews.Az

By Aynur Karimova

Foreign investment is an indispensable part of any development in Iran’s gas industry, Hassan Montazer Torbati believes.

The CEO of Iran Gas Engineering and Development Co said that under the Islamic Republic's Sixth Development Plan (2017-2022), the country needs 5,000 kilometers of pipeline as well as 25 pressure boost stations, SHANA news agency reported.

He also noted that the company currently has the ongoing projects worth 120 trillion rials (about $4 billion, at current exchange rate).

"By the end of the plan, Iran should have had introduced 100 billion rials worth of new projects each year," he said. "This is while the domestic resources can only provide 30 billion rials per year. Therefore, there is no way but to use foreign investments."

BP Statistical Review of World Energy 2015 shows that Iran possesses the world’s largest proven natural gas reserves, at 34 trillion cubic meters - or 18.2 percent of the world’s total proven reserves.

Despite having the world’s biggest gas reserves, Iran only shared 5 percent of global natural gas production, at 172.6 billion cubic meters in 2014 (excluding recycled and flared gas), according to the report.

Iran is keen to update its aging oil and gas infrastructure with a view to increase production and export levels. An initial foreign investment of around $25 billion is targeted and several leading European companies (BP, Eni, Repsol, Shell, Statoil, Total) are believed to have been in discussions.

Iran's moves to upgrade its energy sector comes after the lifting of the international sanctions against the country on January 16, following the International Atomic Energy Agency's confirmation of Tehran’s compliance with the Joint Comprehensive Plan of Action.

Earlier, Iran's acting Deputy Petroleum Minister, Masoud Hashemian Esfahani said his country's oil and gas industry will require $185 billion in investments for 2016-2020.

"Oil and Gas upstream — $85 [billion], downstream oil — $10 [billion], gas downstream — $10 [billion], petrochemical sector — $80 billion," he noted.

Iranian Petroleum Minister Bijan Zanganeh has also given a higher estimate of the investments needed by Iran's oil sector, stating that the Iranian oil industry requires an injection of funds in the order of $200 billion, with $130 billion to be put into the upstream sector and $70 billion into processing facilities.

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Aynur Karimova is AzerNews’ staff journalist, follow her on Twitter: @Aynur_Karimova

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