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NIOC unit reviving $3.3bn LNG production project as Iran eyes booming energy prices
PROJECTS
A National Iranian Oil Company (NIOC) sub- sidiary has announced it has obtained a permit for a $3.3bn liquefied natural gas (LNG) pro- duction facility that will have an output of 5mn tonnes/year, Press TV reported on August 10.
Looking to exploit booming wholesale energy prices, Iran is hoping to ship the plant’s LNG to export markets in Asia and perhaps even in Europe if the political environment becomes conducive. The project to build the plant, named Iran LNG, is one of three long-delayed Iranian LNG projects. The initial plan for the facil- ity envisaged it as having a 10mn tones/year capacity.
US sanctions levied on Tehran in 2018 hin- dered the investment and export plans for Iran LNG, which comes under the Iran Liquefied Natural Gas Company (ILC) company and is ultimately owned by Iran’s Oil Pension Fund under the Ministry of Petroleum.
The sanctions put in place reportedly pre- vented German supplier Linde from exporting equipment needed for the Iran LNG liquefaction train. Iran has since worked to retrofit local tech- nology, but the work is said to have taken longer
than anticipated.
The Press TV report did not elaborate on
whether the project is to benefit from supplies and services of foreign companies. However, during the recent visit of Vladimir Putin to Tehran, NIOC and Russia’s Gazprom signed a memorandum of understanding potentially worth around $40bn that outlined how Gaz- prom will help NIOC develop two gas fields and six oil fields and take part in LNG projects and the construction of gas export pipelines. On the domestic contracting front, there is firm market speculation that Iran’s MAPNA engineering group, which has a track record of successfully localising industrial kit, has been contracted for major work on Iran LNG.
The other two LNG projects previously planned by Iran are the 10mn tonnes/year South Pars LNG , which was to be realised in part- nership with France’s TotalEnergies, and the 16.2mn tonnes/year Persian LNG. TotalEnergies departed its Iranian projects after assessing the risk of getting hit by US secondary sanctions if it did not.™
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