London, Asharq Al-Awsat—Iran still holds the world’s largest proven natural gas reserves, at 33.8 trillion cubic meters—or 18.2 percent of the world’s total proven reserves—according to a BP report published earlier this week, up from 33.6 trillion cubic meters at the end of 2012, when it overtook Russia.
The UK oil and gas giant’s “Statistical Review of World Energy” also showed that despite holding the world’s largest reserves, Iran only accounted for 0.5 percent of global natural gas production, at 166.6 billion cubic meters in 2013.
Years of crippling sanctions have stymied Iran’s oil and gas industries, leaving infrastructure and fields underdeveloped due to lack of investment and expertise.
Energy subsidies coupled with a growing population have also created excess demand which the country’s gas industry has not been able to meet, making it today a net importer of natural gas, despite more than doubling production between 2002 and 2012.
Even a flurry of gas export deals signed during former president Mahmoud Ahmadinejad’s time in office have failed to materialize due to the Islamic Republic struggling to supply its own 77-million-strong population. Only a deal signed with Turkey has remained intact, but Iran has been unable to deliver all of the 10 billion cubic meters per year agreed with Ankara.
However, after the landmark deal on Iran’s nuclear program with the P5+1 world powers last November, the country is now hoping to make grounds in developing its gas industry, and raise output by developing its fields, in the hope that further sanctions will be eased and foreign investment can flood in.
This is especially true of the South Pars/North Dome gas field—the world’s largest, alone accounting for 8 percent of global reserves—which it shares with Qatar.
On Tuesday Iran announced it would begin exporting natural gas from South Pars to neighboring Iraq next March, according to the state-owned Tasnim news agency, following a deal signed in July 2013 to supply three power plants in Iraq with 7 million cubic meters per day, to be increased to 25 million later in the year and 40 million by 2020.
The gas will be transported from the giant field to Iraq via a pipeline that is still under construction, but which Iranian Deputy Oil Minister Ali Majedi said on Tuesday could also in future be extended to other neighboring countries such as Jordan, Syria and Lebanon.
Another deal—worth 60 billion US dollars—was signed in March with Oman to supply the Sultanate with 10 billion cubic meters of natural gas per year over a period of 25 years via a 1-billion-dollar, 162-mile (260-kilometer) pipeline.