Iran prefers to export liquefied natural gas (LNG) to distant markets including the EU, but no agreement has yet been reached on the construction of plants for the purpose, reported Trend News Agency.

The country’s sole LNG project, the 52-percent completed ‘Iran LNG’ needs an investment of about $8-10 billion and talks with foreign investors haven’t yielded any results so far.

Last year, Managing Director of National Iranian Oil Company Ali Kardor said that Iran is targeting exports of 0.5-2 million metric tons per year (MT/y) of LNG using mini-LNG plants and floating LNG vessels (FLNG) — Iran’s alternative projects to export LNG.

The country has signed memorandum of understandings (MoU) with South Korean Kogas on the development of LNG projects as well as with National Energy Administration of China on developing mini-LNG projects.

However, talks on purchasing or manufacturing floating liquefied natural gas (FLNG) vessels in recent months have so far yielded no results.

Now, Kardor says that Iran’s first deal on the construction of a FLNG facility will soon be signed with a Norwegian company.

The 20-year deal is intended to produce 500,000 tons of LNG, Kardor said on October 10, adding that pricing formula of the products will be determined by the Oil Ministry.

He did not disclose the name of the Norwegian firm, but last year it was announced that Tehran is negotiating with Norwegian Golar and Hemla Vantage companies.

Golar owns one of the largest FLNG fleets in the world, while Hemla Vantage was keen to lease a FLNG vessel from a Belgian company, Exmar, to collect and liquefy flaring gas in offshore fields around Kharg Island in the Persian Gulf (the amount of yearly collection and liquidation of flaring gas in Kharg Island can stand at 0.5 MT).

Launching FLNG and mini-LNG facilities will help Iran diversify and expand its natural gas market.

The projects will also grant the country chance to convert its flaring gas (mostly from burning associated gas in the oil sector), which currently amounted at about 11 billion cubic meters per year (bcm/y), into LNG.

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“On a trip to Germany, we had discussions about Siemens’ participation in Iran’s railway and power plant projects,” Deputy Minister of Road and Urban Development for International Affairs Asghar Fakhriyeh-Kashan said on Tuesday.

In the rail sector, Iran is going to buy a number of wagons from Siemens for use on a high-speed line between Tehran, Qom and Isfahan, he said. Siemens will also cooperate on providing signaling equipment and installing communication signs.

“Through financing a number of construction projects, Siemens plans to enter into a joint venture with Iran’s MAPNA company both in the power plant and locomotive manufacturing sector in order to boost domestic production,” he said.

Last month, the Export-Import Bank of China (EXIM) signed a $1.5 billion deal to finance the electrification of a high-speed rail line between the Iranian cities of Tehran and Mashhad.

EXIM’s Vice President Sun Ping said in Tehran that the institution had provided loans for 26 Iranian projects in the electricity, petrochemicals, non-ferrous metals, oil and gas sectors, worth $9 billion.

China Railway Group Limited (CREC) is carrying out the $1.8 billion electrification of the high-speed rail link between Tehran, Qom and Isfahan.

Iran has announced plans to splurge up to $25 billion over the next 10 years on the modernization and expansion of its railway network.

Siemens was one of the first major companies to agree on a deal with Iran after the lifting of sanctions in January 2016, signing a $1.6 billion memorandum of understanding on Iran’s rail infrastructure and a long-term roadmap with MAPNA on the power sector.

The agreement included a license for manufacturing F-class gas turbines in Iran, under which more than 20 gas turbines and associated generators will be delivered over the next four to five years.

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The first major Western energy investment since sanctions against Tehran were lifted will cost up to $5 billion, with production expected to start within 40 months, an Oil Ministry source said, Reuters reported.

The US and other world powers lifted sanctions after the country pledged to roll back its nuclear program.

With the 20-year deal, Total is now returning to Iran, where it first began operating in the 1990s. Total CEO Patrick Pouyanné said in a statement on Monday that the investment would be “in strict compliance with applicable national and international laws”.

The US still has restrictions in place that block most American companies from investing in Iran. And some Western companies have been reluctant to jump in since Iran still faces sanctions that prevent firms from transacting with Iran in US dollars.

Total estimates the first phase of the project will cost around $2 billion. It is taking a 50.1 percent stake in the South Pars project. CNPC will own 30 percent while the other 19.9 percent will go to Petropars.

The project will have a production capacity of two billion cubic feet per day, or 400,000 barrels of oil equivalent per day including condensate, according to Total.

Iran’s Oil Ministry predicts the project will eventually produce gas products worth $54 billion based on current prices. The gas will start flowing into the Iranian market in 2021.

Iran has significantly ramped up its energy production since the sanctions were relaxed.

Figures from OPEC show Iran has boosted its daily crude oil production by more than 33 percent since 2015.

Iran sits on nine percent of the world’s proven oil reserves and 18 percent of the planet’s natural gas, according to data from BP’s Statistical Review of World Energy.

Iran and Qatar share the South Pars field.

Iran has signed a flurry of deals with Western companies over the past year since the easing of international sanctions on Tehran after an accord was reached over its nuclear program.

Iran needs foreign investment to repair and upgrade its oil and gas fields. It also seeks the transfer of technology to its oil industry after a decade of sanctions.

Iran has named 34 companies from over a dozen countries as being eligible to bid for oil and gas projects using the new, less restrictive contract model.

The firms include Shell, France’s Total, Italy’s Eni, Malaysia’s Petronas and Russia’s Gazprom and Lukoil, as well as companies from China, Austria, Japan and other countries.

Russia’s Zarubezhneft signed an MoU to conduct feasibility studies on two joint fields in the west of the country.

Norway‘s International Aker Solutions Company signed an MoU to modernize Iran’s oil industry.

In May 2016, Austria’s OMV signed an MoU for projects in the Zagros area in western Iran and the Fars field in the south.

South Korean Daewoo Engineering and Construction (Daewoo E&C) signed an MoU to construct an oil refinery in Bandar Jask, on the southern coast of Iran.

Italy’s Saipem signed MoUs to cooperate on pipeline projects, upgrading of refineries and development of Tous gas field in the northeastern province of Khorasan Razavi.

Norwegian oil and gas company DNO said it was the second Western energy company after Total to sign a deal with Iran under which it agreed to study the development of the Changuleh oilfield in western Iran.

Lukoil, Russia’s second biggest oil producer, hopes to reach a decision on developing two new oilfields in Iran.

Germany’s Siemens AG signed an MoU in May to overhaul equipment and facilities at Iran’s oil operations and refineries.

BASF’s Wintershall oil and gas exploration subsidiary signed an MoU with the National Iranian Oil Company in April 2016.

President Rouhani:
Developing South Pars Phase 11 not only an economic contract, but also a scientific, technological, management cooperation

President Rouhani met with the Chairman and CEO of France’s Total company and described South Pars region as an important centre for developing international cooperation with Iran in the field of energy-technology.

In the meeting that was held on Monday in Tehran, Dr Rouhani told Total’s Patrick Pouyanné: “Due to the good potentials and hard-working young men in Iran, the contract of developing Phase 11 of South Pars is not only an economic one, but also a scientific, technological and management cooperation”.

Total CEO: We seek a long-term cooperation with Iran

“The Islamic Republic of Iran and France have always had good relations and cooperation with each other,” he continued saying.

Referring to France’s position in economy and energy technology, he added: “The signing and execution of this contract will be a significant step in development of economic and technological cooperation between the two countries”.

Stating that the 11th administration has attempted to finalise the Joint Comprehensive Plan of Action (JCPOA) to clear the path for economic cooperation between major companies and Iran, the President said: “Fortunately, this political will from the Iranian side and among P5+1 countries paved the way for this agreements with Total”.

President also referred to his Europe and France visit after the signing of JCPOA, adding: “In Paris, there was a good political will among the authorities of both countries to develop cooperation and important agreements were signed between the two countries to deepen ties and cooperation”.

“It is our policy to cooperate with major companies such as Total,” said Dr Rouhani, adding: “Currently, projects in gas and oil worth roughly $200bn are ready to be invested on and major foreign companies can cooperate in these projects”.

“We must work hard to achieve peace and stability in the region serving economic progress and development of the region, because scientific and developmental cooperation can help us combat ignorance and poverty as the bedrocks of terrorism expansion,” he continued.

The President also expressed hope that with the new agreements and cooperation in the field of gas, oil and petrochemicals, Iran and France take considerable steps in developing ties.

During the meeting, the Chairman and CEO of France’s Total company Patrick Pouyanné also expressed happiness over meeting the President of the Islamic Republic of Iran and described the contract as a very important one, saying: “Today, we are very happy that we could finalise and execute the contract with the help of the authorities of the two countries”.

Stating that the JCPOA agreement has paved the way for further development of relations between European countries and Iran, he said: “We are optimistic about our cooperation with Iranian companies”.

“We seek a long-term cooperation with Iran,” continued Pouyanné.

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Deputy Minister of Roads and Urban Development for International Affairs Asghar Fakhrieh Kashan was quoted by Press TV as saying that nine financial institutions from Norway, Denmark, Ireland, Britain, China and Japan had already approached Iran to fund the purchases.

He did not disclose the names of the interested financers.

Nevertheless, he underlined that arrangements to hold a tender to choose the financier for the purchases were underway, adding that tender documents would be sent out to potential bidders within a month.

Last week, he was quoted by THE media as saying that Britain’s key export credit agency — UK Export Finance (UKEF) — had informed Iran’s Ministry of Roads and Urban Development that it was ready to provide funding for all of Iran’s purchases from Boeing and Airbus.

He stressed that Iran wanted to have an open hand in choosing the best financiers and that a tender to this effect would be held soon.

“Iran Air is preparing the tender documents so that they would be sent to all credible financiers worldwide,” Fakhrieh Kashan told IRNA.

“We are in conditions that permit us to choose our desired financiers in a competitive atmosphere that a tender creates.”

Also, Iran’s media last October quoted an unidentified government official as saying that Boeing had sealed a deal with an American bank to provide financing for Iran’s purchase of airliners in cooperation with a Japanese bank.

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The biggest deal is reserved for Japan’s Marubeni, Chiyoda and Mitsui companies to upgrade Isfahan refinery, Deputy Oil Minister Abbas Kazemi told reporters in Tehran, Press TV reported.

“Negotiations have been held with the three companies and the deal for this massive refining project worth $3.6 billion is expected to be finalized soon,” he said.

Another $2-billion contract is about to be signed with South Korea’s Daelim to boost oil processing capacity at Isfahan refinery, Kazemi added.

However, the most imminent contract, valued at $3 billion, is expected to be concluded within the next couple of weeks with the Chinese to develop and improve the quality of Abadan refinery.

Kazemi predicted the formal implementation of the project beginning in the current Iranian month, which started on January 21, with the participation of energy officials from the two countries as well as senior directors of China’s SINOPEC company.

The scheme is planned to cut furnace oil production at the plant to about 20 percent from the current 40 percent, the official said.

China has opened $1.3-billion credit line to financier the plan, he said, adding another $1.7 billion is expected to be opened in the spring.

Iran plans to sign contracts worth $14 billion to fix and upgrade the quality of Tehran, Bandar Abbas, Isfahan, Tabriz and Abadan refineries, said Kazemi who is also managing director of National Iranian Oil Refining and Distribution Company.

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The tournament will be held in Chongqing, China during March 5-13, Tasnim News Agency reported.

It is the Asian qualification round for the 2017 FIVB Volleyball Girls’ U-18 World Championship in Argentina.

A total of 12 teams have confirmed their participation in the nine-day event, which will be the first Asian Volleyball Confederation event of the year. They consist of reigning champion Japan, China, Thailand, South Korea, Chinese Taipei, Kazakhstan, New Zealand, Hong Kong, Uzbekistan, Australia, Iran and Samoa.

The squads have been divided into four pools, with host China joining Hong Kong and Iran in Pool A, Japan, New Zealand and Samoa in Pool B, Thailand, Kazakhstan as well as Australia in Pool C and South Korea, Chinese Taipei and Uzbekistan in pool D.

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Deputy Head of NIOC for Development and Engineering Affairs Gholamreza Manouchehri said “a list recently published by National Iranian Oil Company was relevant to applicants from Spain, Germany, Italy, Austria, Japan, China and South Korea which had been qualified in Pre-Qualified Iran’s Oil and Gas Upstream Projects Tender Round.”

“Names of Lukoil and Gazprom from Russia were on the list,” highlighted the official asserting that a second list of qualified foreign companies will be soon released.

Manouchehri, while estimating that Russian firms, whose name were among qualified candidates, will be present in the second, underlined that NIOC has inked Memoranda of Understanding (MoUs) with Russia’s Zarubezhneft and Tatneft both of whom were absent in the first published list.

“NIOC must have approved of all firms with which a cooperation agreement has been inked,” noted the official.

He further maintained that claims on disqualification of Russian firms reiterated that Iran welcomed cooperation with credible Russian parties who held new technologies.

National Iranian Oil Company has so far sealed MoUs with seven Russian oil giants for development projects or boosting recovery factor in various oil and gas fields.

Accordingly, research and development MoUs have been signed with Russian firms like Lukoil, Tatneft, Zarubezhneft and Gazprom for expansion of seven Iranian oilfields including Mansouri, Ab Teimour, Aban, West Paydar, Dehloran, Cheshmeh Khoshk and Chenguleh.

Accordingly, Russian firms enjoy the highest rate of cooperation in upstream sector of Iran’s oil and gas industry as compared with Asian or European companies.

Nevertheless, names of Russneft, Tatneft and Zarubezhneft were missing on the recently-published list by NIOC giving rise to hypotheses that the three Russian oil giants had been disqualified.

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Gholamali Kamyab said attracting $10 billion of foreign finance has been defined as a project for the CBI in the area of Resistance Economy, Tasnim News Agency reported.

He made the remarks in a meeting with CBI officials, which was attended by First Vice-President Es’haq Jahangiri in Tehran.

The measures taken by the CBI in this regard include extensive talks with some foreign banks, such as the Export–Import (Exim) Bank of China, Italy’s Mediobanca and Denmark’s Danske Bank, he noted.

The CBI vice governor added that up to now, 72 percent of the project has been implemented.

There has been a new wave of interest in ties with Iran since Tehran and the P5+1 group of countries – Russia, China, the US, Britain, France and Germany – reached a deal on Iran’s nuclear program in 2015.

The comprehensive nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA), terminated all nuclear-related sanctions against Iran.

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Chinese firms were expected to lift between three million to four million barrels more Iranian oil each quarter in 2017 than last year, four sources with knowledge of the matter estimated. That would be about five percent to seven percent higher than the 620,000 barrels per day (bpd) of Iranian crude the country has imported during the first 11 months of 2016, according to the customs data.

Iran, a member of the Organization of the Petroleum Exporting Countries (OPEC), won an exemption from the group’s production cuts agreed to on Nov. 30 and may raise output slightly.

China’s demand for foreign crude could touch new highs as state-run refiners start up new plants and as Beijing allows more independent refiners to import crude, with the country forecast to remain a key driver of 2017 demand growth.

State refiner Sinopec Corp and state-run oil trader Zhuhai Zhenrong Corp, the two biggest Chinese lifters of Iran’s oil, are set to roll over annual supply agreements with National Iranian Oil Co (NIOC), with combined volumes of about 505,000 bpd, two sources with knowledge of the agreements said.

Additionally, China National Petroleum Corp (CNPC) and Sinopec expect to lift more oil this year from two oilfields they operate under service contracts, the sources said.

A press official with Sinopec said the company does not comment on operational matters. CNPC and NIOC did not immediately respond to requests for comment.

Sinopec signed a development deal for the Yadavaran field in late 2007 with CNPC signing a deal for the North Azadegan field in 2009, after Japanese and European companies pulled out of the projects, both in the southwestern Iranian province of Khuzestan, due to sanctions over Iran’s nuclear program.

Both fields started pumping oil in early 2016, with North Azadegan reaching full production in the third quarter and Yadavaran in the fourth quarter, and they are currently pumping at around 160,000 bpd.

“The terms of return on investment are still being finalized …but it’s safe to say Sinopec is going to lift more from Yadavaran this year than last,” said a Beijing-based oil executive familiar with Sinopec’s operations on Yadavaran.

A separate senior trading source estimated that Sinopec could lift about four million barrels of Yadavaran crude, considered a heavy grade with an API gravity rating of about 25, every quarter this year. The person did not give an earlier comparison.

After first shipments last October, CNPC is expected to lift an average of about three million barrels from North Azadegan each quarter, said a second senior trader with knowledge of CNPC’s Iranian production. /Reuters

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Ahmad Sadeqi Golmakani told IRNA that a Chinese state-owned company has inked a memorandum of understanding (MoU) worth $2 billion with the Iranian side to invest in SPEZ.

He said the MoU is considered the biggest foreign investment in that region, adding that foreign investments in Sarakhs Special Economic Zone have increased in the past year.

Several foreign investors from South Korea, Italy and China have recently voiced their willingness to invest in the region, he noted.

SPEZ, which covers an area of 5,290 hectares, is situated the northeast of Iran and connects ports on the Gulf of Oman and the Persian Gulf to Central Asia, the Caucasus and Russia.

In view of its geographical location as in the center of ECO countries, the zone is being considered the golden gate for Central Asia, China and Russia. It connects major trade markets in Central Asia with the Persian Gulf countries in the south of Iran, Europe in the west as well as Afghanistan and Pakistan in the east of the country.

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