Page 43 - IRANRptFeb22

9.0 Industry & Sectors 9.1 Sector news
9.1.1 Oil & gas sector news
Gas flows from Iran to Turkey ‘return to 50% of contractual level following stoppage’
Iran to increase oil production capacity
Gas flows to Turkey from Iran have reportedly returned to 50% of the daily contractually agreed level following the stoppage announced at the start of the fourth week of January.
Turkey’s pro-government Daily Sabah publication quoted “Turkish sector sources” as giving the update, while also stating that repairs to the Iran-Turkey gas pipeline on the Iranian side of the countries’ border have been postponed until the spring.
The sources were further cited as saying that the current gas volumes and pressure were not in line with contractual conditions.
Iran supplies around 16% of gas imported by Turkey, with some of the volumes directed to power plants for the production of electricity.
The interruption to Iranian gas flows caused the authorities to apply substantial restrictions to electricity use by producers in Turkey’s many industrial zones. On January 28, Turkey’s state-controlled
pipeline corporation BOTAS said that the reduction in the supply of natural gas to industrial facilities, including power plants, would from the start of this week be set at 20% compared to 40% last week.
Turkey is almost completely reliant on energy imports from Russia, Azerbaijan and Iran.
Some Turkish manufacturing companies, including car parts maker Ege Endustri, cardboard manufacturer Kartonsan and defence automotive parts maker Katmerciler halted production due to the energy cuts, Daily Sabah also reported.
Turkish President Recep Tayyip Erdogan on January 27 refuted speculation that the Iranian gas stoppage was a consequence of unpaid bills for imports. Energy prices have risen sharply in Turkey as a consequence of the Turkish lira’s collapse against the dollar. The lira lost 44% against the USD last year.
The National Iranian Oil Co. (NIOC) announced this week that it plans to increase the country’s crude oil production capacity from the current level of around 3.8mn barrels per day to 5.7mn bpd by the end of the decade.
Speaking to local media, NIOC director of corporate planning Karim Zobeidi said: “By attracting the necessary investment, we intend to increase Iran’s oil production capacity to 5.7mn barrels in the next eight years.”
He added that “the participation of domestic investors in the drilling operations of new oil wells is more important for us.” Zobeidi said that maintaining oil production levels was another focus area for investment, pointing to the need for well workovers, additional processing facilities and pipelines.
Much of the planned expansion will come from the south-western West Karoun oilfield cluster.
In October, NIOC CEO Mohsen Khojastehmehr reiterated the company’s focus on expanding production from the area, targeting $11bn of budget allocation to add 1mn bpd of new output.
In comments carried by official state energy media outlet SHANA, he said: “We need around $11bn in investment to develop the second phase of the North
43 IRAN Country Report February 2022 www.intellinews.com