Iran faces challenges realizing natural gas potential
Until last year, Iran's natural gas production was almost entirely consumed domestically. Now it is set to exponentially increase natural gas exports in coming years, but not without challenges.
With 33.5 trillion cubic meters of natural gas, Iran has the largest conventional gas reserves in the world. Along with its vast oil reserves, it also has sizable, non-associated conventional gas resources that are being developed aggressively. With regard to exports, however, natural gas has never matched the significance of oil in Iran. Nonetheless, Tehran has boosted gas production tremendously in the past few years, despite sanctions and other challenges. Up until 2016, almost all of Iran's gas production was used for domestic consumption, freeing up more oil for export. In the meantime, a saturation of domestic utilization has allowed Iran to boost its exports, which are still negligible compared to the resource potential. Officials recently said that gas exports grew by 64% during the period of March 21 to Aug. 22, 2017, compared to the same period in 2016.
According to the “BP Statistical Review of World Energy,” Iran produced 202 billion cubic meters (bcm) of gas in 2016. The country’s Ministry of Petroleum envisions annual gas production of 300 bcm by 2020, which is a reflection of its enormous resource base. Other objectives and priorities are as follows:
