South Pars Past, Present, Future: Interview

Gholam-Reza Manouchehri has experienced working both in offshore and onshore sectors. He is well familiar with subsea pipelaying and refinery construction. He also knows sanctions and lack of finance.

Manouchehri has a brilliant background in companies like Petropars and Iranian Offshore Engineering and Construction (IOEC), both involved in the development of South Pars Gas Field. He is now serving as the Deputy Managing Director of the National Iranian Oil Company (NIOC). The exclusive interview he has granted to "Iran Petroleum" is as follows:

Q: How do you see the future of South Pars gas field?

A: Except for SP Phase(s) 11, other phases of South Pars are forecast to have been completed within two years or at most 30 months. Phase 11 development is expected to be finished in four years. South Pars will definitely play a major role in the supply of gas and condensate in the country. After remaining phases are developed in South Pars, gas condensate production in this jointly owned field will reach 1 million bpd.

Q: Could you name the future challenges to the South Pars development?

A: The pressure fall-off in gas and gas condensate will be one of the main challenges in this field.

Q: What could be done to cope with this problem?

A: Using pressure booster compressors could be an effective measure. Furthermore, reservoir studies must be carried out more seriously and more comprehensively. Changes in the condition and behavior of reservoir and forecasting future conditions are also important. Other layers of South Pars should be also studied. Transferring gas from joint fields in a way to avoid a quick fall-off in the gas pressure and volume of gas condensate production is also another measure. Pressure fall-off is a natural phenomenon, but we have to try to lengthen the production plan.

Q: So South Pars will need more efforts and activities in the future.

A: That’s true. Drilling in this joint field will be based on studies in the future. The type of drilling may change. Moreover, there is much sensitivity with regard to the jointly owned parts of this field. Since the Qatari side is recovering gas along with us, we will naturally see more problems.

Q: Do you think there is technology for preserving production in Iran?

A: This technology is accessible and naturally in the future, we will be able to increase the share of Iranian companies in implementing such projects. The more we go ahead, the higher gas and gas condensation will cost, and we have to recognize that production costs in South Pars will go up.

Q: How much does production cost in South Pars now?

A: Implementation of each phase of South Pars under the current circumstances is estimated around US$2.5 billion and our production costs stand at 2% or 3% of the value of investment. It is a low figure, but will increase in the future.

Q: How much do you think this increase will be?

A: It depends on the conditions of upcoming years and the amount of additional investment. But undoubtedly the costs of installations will increase. Therefore, we cannot announce any accurate figure. However, it will most probably be twice.

Q: Are you happy with the current management of South Pars output maintenance?

Regarding the maintenance of onshore facilities, NIOC is largely experienced and we have no serious problem in this regard. However, we need to improve standards of production, reduce flare gases and minimize environmental damage. For this purpose, we need investment. Moreover, in some refineries we need to implement a complementary procedure to eliminate flare gas.

Q: What about offshore maintenance?

A: In this sector we need to pay more attention and apply higher standards because in the offshore sector our operation models do not fully comply with international conditions. At the beginning, our platforms were designed to be unmanned, but they are manned now. Therefore, we have to take into account this fact that such facilities are exposed to more degradation and more difficult to accede. We have to run South Pars which has a 30-year to 50-year future.

Q: How do you assess South Pars’ role in empowering local contractors?

A: Iranian contractors became international thanks to South Pars. The fact is that South Pars has been instrumental in upgrading local industry and project management mechanism, development of contracting system and engineering services companies. In the past, we often heard that Isfahan Steel Mill was a good model in terms of concrete pouring and molding. But South Pars has played a major role in developing EPC knowhow, petroleum engineering, refinery construction and equipment manufacturing. We cannot say that all this happened first in South Pars, but given the scale of work, many industrial plants, factories and contracting companies emerged and grew under the aegis of South Pars and then they spread across the country. I can say that South Pars improved technical standards and raised the expectations of managers with regard to the quality of work. Moreover, a valuable interaction was created between Iranian and international companies at different levels of activity.

In fact, after implementation of phases 1, 2 and SP Phase(s) 6-8 by Iranian and foreign companies, the top role in SP Phase(s) 12, SP Phase(s) 13, SP Phase(s) 14, and SP Phase(s) 15-16 was assigned to Iranian companies. Although we had problems with some of these projects due to high costs and delays, Iranian companies finally proved their capabilities in drilling, offshore and onshore operations and pipelaying.

Q: In case you are asked to name several Iranian companies that have been empowered through their activities in South Pars, which companies will you name?

A: Undoubtedly Petropars is at the top of them. This company managed to play the role of a developer. OIEC as an EPC company, IOEC in offshore EPC and some private companies are also among them. SADRA has also shown good growth although it delayed some of the projects due to local problems and has so far failed to deliver platforms for phases 13, 14 and SP Phase(s) 22-24. Nevertheless, generally speaking, Iranian companies have fared well in the development of South Pars.

Q: Would you please cite some of the measures taken first in South Pars?

A: Drilling, deepwater drilling, subsea pipelaying, and project macro-management.

Q: Once South Pars phases have been completed, provided that unbridled consumption is contained, which role could Iran play in the gas market?

A: After completing South Pars phase development, we will have the chance to invest in LNG sector. Of course, it is already possible. [But] then we can enhance our gas exports to the region.

Q: What have been the challenges of South Pars in recent years?

A: Investment, project mismanagement, supply of equipment and commodities were among these challenges. But these problems have been resolved after the implementation of the JCPOA and the [ensuing] lifting of sanctions.

Q: How do you assess cooperation with foreign companies in the development of South Pars?

A: During years of sanctions, NIOC and its staff demonstrated their capabilities in developing oil and gas fields, particularly the jointly owned South Pars field. During this period, phases 12, 15, 16, SP Phase(s) 17-18, SP Phase(s) 19, and SP Phase(s) 20-21 were developed. Gas production capacity in South Pars currently stands at more than 480 Mcm/d, which is expected to reach 580 Mcm/d early next year. As far as recovery from South Pars is concerned, we have to continue producing gas and gas condensate more smartly. In order to have access to cutting edge technologies, we need to cooperate with service companies and international oil companies (IOCs) so that they would bring capital, technology and management into the country.

Q: You were manager in both Petropars and IOEC and you have experience of offshore and onshore sectors. How do you assess your own performance in South Pars?

A: I thank God for my contribution to the development of these fields from the very beginning. I joined the project when Phase 1 was in its final day of development; I managed development of phases 6 to 8. I also managed development of Phase 12 half way, as I was CEO of Petropars and project manager. When I left this company, all contracts had already been signed. The contract for Phase 19 of South Pars was signed when I was at Petropars. Furthermore, when I was IOEC manager, seven to eight platforms were finally completed and installed.

Q: Would you please name five influential people in the South Pars development?

A: Certainly Mr. Zanganeh (minister of petroleum) will occupy the ranks one to three. He is followed by Misters [Akbar] Torkan and [Mehdi] Mirmoezzi. But Mr. Zanganeh was the pioneer of South Pars and he was the one who brought about fundamental changes in the petroleum industry. - Shana


Algerian Gas Flows to Italy Down on Field Maintenance, Europe Offsets Fall

Algerian gas flows to Italy dropped by 11 million Mcm, or 25%, on Wednesday to 32 Mcm, according to data from Platts Analytics' Eclipse Energy, with the cause said to be maintenance at an unnamed Algerian gas field.

Supplies from northwest Europe via the Passo Gries interconnection point rose by almost the same volume -- some 13 Mcm -- to offset the fall from Algeria, the data show.

Deliveries to Italy via Passo Gries hit 37 Mcm on Wednesday, the highest level since mid-January. Italian imports from Russia and Libya, and LNG sendouts, remained broadly unchanged day on day.

A source with Algerian state-owned company Sonatrach said this week there would be some field maintenance at an unnamed gas facility, but did not elaborate on the timeframe or the volume impacted.

According to nominations for Thursday, the pattern is set to remain the same, with Algeria nominated to flow 30 Mcm and the Passo Gries point expected to supply 36 Mcm, Platts Analytics data show.


Algerian gas flows to Italy have been averaging at a steady rate of some 46 Mcm/d since the start of the second quarter, so the drop down to 33 Mcm/d on Wednesday was notable.

Algerian flows had already dropped sharply in April from the Q1 average of 67 Mcm/d, with the start of the new quarter seeing a big increase in Russian supplies to Italy, likely a result of contract optimization by Italian buyers.

Italy is often a good gauge of whether supply contracts are competitive versus each other and versus the northwest European hubs at any particular time.

Italian buyers have import contracts with Russia's Gazprom and Algeria's Sonatrach, but can also import gas from the northwest European natural gas hubs, giving them options when long-term contract prices diverge from hub prices.

Italy also has 11 million mt/year (15 Bcm) of LNG import capacity and significant storage of around 16.5 Bcm, making it well disposed to optimization.

Despite falling off from their Q1 highs, Algerian supplies are still at record high levels in 2017, having already surged in 2016. Last year, supplies to Italy averaged 49.1 Mcm/d -- a total of 17.96 Bcm -- compared with just 18.9 Mcm/d in 2015.

But supplies in 2017 to date are averaging 59.4 Mcm/d, which on an annualized basis would represent flows of 21.68 Bcm. In April, the Italian ambassador to Algeria, Pasquale Ferrara, said Italy's imports of Algerian gas could exceed 20 Bcm this year.


6 South Pars Development Phases Operational Post-JCPOA

The operation process of development phases of South Pars gas field under the Administration of President Hassan Rohani started with the inauguration of SP Phase(s) 12. It continued as SP Phase(s) 15-16 came online. The developments were completed as SP Phase(s) 17-18, SP Phase(s) 19, and SP Phase(s) 20-21 came on-stream.

Development of South Pars is of high importance when it is known that the gas recovered from each phase would add 1% to Iran's Gross Domestic Product (GDP), which means job creation and outperforming Qatar which jointly owns the field with Iran.

Ali Kardor, Managing Director of the National Iranian Oil Company (NIOC), in an interview, has spoken of South Pars development.

Q: Under the Rohani Administration, the Iranian Ministry of Petroleum gave priority to South Pars development phases in a bid to accelerate the development of the giant offshore gas reservoir. Would you please explain about it?

A: When the 11th Administration took office, Bijan Zanganeh (Iran's Minister of petroleum) visited the South Pars development phases to get to know how much had been spent on each phase and to learn about related issues. Anyway, after the new Administration took office crude oil prices had fallen, we were under sanctions and our oil exports rate had declined. Therefore, NIOC's financial resources had declined sharply and we could not develop all phases together. Had we done so, none of these phases would have reached production. Therefore, we decided to give priority to the phases and we allocated financial resources in priority to projects with a higher rate of progress so that they could reach production faster. Other projects received less finance.

Q: A major problem with the development of phases was financial shortages. How did the Petroleum Ministry deal with the issue?

A: The financing of South Pars development had been partly done under the 10th Administration. Under the 10th Administration, upon an instruction by the Supreme Leader, Ayatollah Ali Khamenei, US$5 billion was allocated to the development of 5 phases. The 11th Administration was also looking for permits to finance development of this field. The Islamic Consultative Assembly also helped the government in this field and on the strength of their note the Iranian Ministry of Petroleum and NIOC guaranteed that contractors operating joint oil and gas fields including South Pars could benefit from the National Development Fund (NDF). Therefore, we managed to provide other financial resources than the NIOC local resources for South Pars development, so that the progress of phases would pick up speed.

Q: How much has been invested in the completion and operation of phases 17-18, 19, and 20-21?

A: The completion and operation of these phases of South Pars have cost more than US$18 billion; nearly US$7 billion in Phases 17-18, US$5.5 billion in Phase 19, and US$5.3 billion in Phases 20-21.

Q: Would you please also speak about the importance of South Pars and its economic interests?

A: Operating each phase of South Pars will add 1% to the country's GDP. South Pars supplies gas in the country and provides welfare for people in the winter. Furthermore, enhanced production from this field will help natural gas replace oil products, which will in turn lead to more export of oil products and directly impact job creation, the economy, etc. Any delay in bringing these phases into operation means funneling profits to Qatar's market.

Q: How did the atmosphere created following the implementation of Iran's nuclear deal with six world powers, known as the Joint Comprehensive Plan of Action (JCPOA), contribute to the development of South Pars?

A: Facilitation of financial transactions and the possibility of opening Letters of Credit (LCs) played an effective role in completing the process of development of South Pars phases. The post-JCPOA lifting of the ban on [buying] some compressors, valves and other equipment used in the projects, which were stuck in European countries, United Arab Emirates (UAE), etc. helped accelerate the implementation of the projects.

In the wake of the implementation of the JCPOA, 10 compressors including four off-gas compressors and six propane refrigerant compressors were received from Siemens to be used in the development of Phase 12 of South Pars.

Six Siemens-made compressors were delivered in March 2016 to be used in the development of Phases 17-18. A large amount of pipelines, joints and Inconel valves for Phases 17-18 and 20-21, and air blowers in the sulfur production unit of Phases 20-21, all made by top European companies, were among other commodities that were delivered to these two phases in the first months of the current year (March 2017-18). Placing an order for ethane recovery turbo-expanders in Phases 19 and 20-21 was another measure that would have been impossible without the JCPOA.

Q: It seems that some phases of South Pars would face production decline in coming years. What’s your solution to deal with such challenges?

A: That's true. That is why we have to use compressors and pressure-booster platforms in South Pars in order to avoid pressure fall. These platforms weigh 19,000 to 20,000 tons. Iranian companies can build platforms weighing up to 7,000 tons and the contractors' yards do not have the equipment to build pressure-booster platforms. Therefore, we have to apply special equipment and technology which Iranian companies lack. As foreign companies developed Phases 2 and 3 of South Pars and the Iranian contactors were empowered in the next phases, Iranian companies could become more powerful throughout the construction of these platforms, and the technology for building pressure-booster platforms will be transferred into the country.

Q: How much gas will be added to Iran's output when Phases 17-18, 19, and 20-21 come on-stream?

A: According to the NIOC Directorate of Corporate Planning, in September 2013 when the 11th Administration took office, Phases 17-18 had 78.53% progress. When the new administration took office, Phase 19 was 67.09% complete and Phases 20-21 was 51.87% complete. We are now witnessing their completion and operation. Their full operation will add more than 150 Mcm/d to the South Pars output.

Q: How much has NDF allocated to the South Pars development? Is it enough to rely on NDF?

A: This year, more than US$3 billion was withdrawn from NDF for the development of South Pars. However, mere reliance on the NDF resources is not a long-term and defendable approach. These resources will help the development of jointly owned fields until the way is cleared for attracting foreign investment.

NIOC is making efforts to apply a variety of investment attraction methods in order to reduce dependence on domestic financial resources. This company is facing numerous financial bottlenecks. In order to deal with development projects under such circumstances we need to develop skills to attract foreign investment and apply creative methods.

The profits gained from the issuance of NIOC bonds, which were printed last March, have been used for building utilities in the South Pars projects. In the integrated development plan for South Pars, enacted by the Council of Economy, all activities needed for the development of remaining South Pars phases, except for SP Phase(s) 11, have been envisaged.

Q: One of the largely used equipment, particularly in South Pars, is corrosion resistant alloy (CRA) coiled tubing. The grounds have recently been paved for the transfer of technology for manufacturing this type of tubing into the country. Would you please elaborate on this issue?

A: CRA coiled tubing is among the most consumed and the most expensive equipment used in the petroleum industry. Manufacturing this product requires access to state-of-the-art technologies and is among hi-tech industries. Iran has been importing CRA coiled tubing ever since its petroleum industry was born more than 100 years ago. The technology for its manufacturing is monopolized by several countries. Therefore, the tender bid for the procurement of 600 kilometers of CRA coiled tubing was recently held by Pars Oil and Gas Company (POGC). It was agreed that domestic and foreign manufacturers would cooperate to facilitate the transfer of technology for this widely consumed commodity into the country. The winner of the bids has been named and construction is set to start soon. NIOC is seriously pursuing the transfer of technology for building these pipes into the country and we hope to become CRA manufacturers in the coming years.

Q: How do you assess the performance of Iranian contractors in South Pars?

A: Naturally, domestic companies spend more time and budget than international companies to operate projects. Now imagine that international sanctions increased expenditure and prolonged the implementation of projects. But in the meantime, operation of these projects has resulted in more experience for domestic companies. We hope that after having acquired these experiences and through more interaction between Iranian and international companies we will witness, in the coming years, lower costs and less time spent on the operation of projects by our contractors.

Q: What are NIOC plans for developing North Pars Gas Field?

A: Development of jointly owned fields is a priority in the petroleum industry and investments are now focused on these fields. North Pars is an independent field and we can develop it in the future, too. However, in case South Pars experiences pressure fall and pressure-booster platforms could not support necessary gas output we can use North Pars to make up for gas shortages. If not, we can use the North Pars gas for LNG and exports (on North Pars LNG). Development of jointly owned fields remains a priority for NIOC and that is why all activities in South Pars are concentrated on maximum recovery from this field. – Shana


OPEC Mulling Whether to Cap Nigeria’s Production

OPEC is debating on Thursday whether to include Nigeria in its pact to restrict oil production, two OPEC delegates said. Nigeria and Libya, both suffering from unrest, were excluded from production caps agreed by OPEC and non-OPEC producers in December last year and effective from January until June 2017.

Saudi Energy Minister Khalid al-Falih said earlier on Thursday there was no plan to impose caps on Nigerian or Libyan production. Nigerian production has risen in recent months after several fields restarted production. The Organization of the Petroleum Exporting Countries agreed on Thursday to extend production cuts by nine months, delegates told Reuters.


Oil Dips after OPEC Deal Extended

Oil extended falls on Friday after tumbling in the previous session when OPEC and allied producers extended output cuts but disappointed investors betting on longer or larger supply curbs.

At Thursday's meeting in Vienna, the Organization of the Petroleum Exporting Countries (OPEC) and some non-OPEC producers agreed to extend a pledge to cut around 1.8 million barrels per day (bpd) until the end of the first quarter of 2018. The initial agreement would have expired in June this year.

Crude oil plunged 5% following the announcement, and held its losses early on Friday. Brent crude futures were at US$51.26 per barrel at 0500 GMT, down 20 cents, or 0.4%, from their last close. US West Texas Intermediate (WTI) crude futures were back below US$50, at US$48.61, down 29 cents, or 0.6%.

"With Russia and Saudi announcing nine months (of extended cuts) a week before, this was already priced in, so the market wanted the "over-and-above" which didn't come - hence the sell-off," said Virendra Chauhan, oil analyst at Energy Aspects in Singapore, referring to a statement by Saudi Arabia and Russia earlier in May that a none months extension to the cut was needed.

Britain's Barclays bank said the ongoing production cut would result in a drawdown of bloated fuel inventories, but added that OPEC's goal of bringing stocks down to their five-year average would not be reached within the timeframe of the production cut.

Other analysts, including at Goldman Sachs and Jefferies bank said a normalization of oil inventories could occur in early 2018.

Analysts also said that the OPEC-led production cuts would support a further rise in US output.

Ann-Louise Hittle, vice president at energy consultancy Wood Mackenzie said that the "decision in Vienna sends a signal of continued support for oil prices from OPEC which helps US onshore drillers make plans" to further increase their production.

US oil production has already risen by 10% since mid-2016 to over 9.3 million bpd, close to the output of top producers Russia and Saudi Arabia.

"OPEC agreeing to nine months without deeper cuts leaves prices at the mercy of inventories and US production and demand," said Greg McKenna, chief market strategist at futures brokerage AxiTrader.

Goldman Sachs warned that the biggest risk to oil markets was what would happen next year, at the end of the OPEC-led production cut.

With US output rising steadily and OPEC and its allies potentially ramping up production in 2018 to regain lost market share, many traders are already expect another price slump.


Iran, Czech Republic Opt for Expansion of Mutual Cooperation

Iranian and Czech officials underlined the need for broadening of mutual cooperation in different economic fields. During a meeting in Czech Republic on 26 May 2017, Iranian Chargé d'Affaires to Czech Ali Akbar Jokar and Governor-General of Liberec Province Martin Půta explored avenues for bolstering and reinvigorating bilateral ties. "Thanks to its special scientific and technical infrastructures, Liberec is capable of being Iran’s partner," Půta said during the meeting. The Czech official also pointed to high capacities of Liberec and its cooperation with Iran in industrial and crystal fields, and expressed hope for further relations.

During his trip to the city, Jokar also visited vice-chancellor of Liberec University and the chairman of Liberec Chamber of Commerce. Both sides agreed on exchanging students at PhD level, doing joint research and granting sabbatical leaves to university professors.

In relevant remarks in mid-October, Iran Minister of Energy (Water and Electricity) Hamid Chitchian in a meeting with First Vice President of the Senate of the Czech Republic Premysl Sobotka in Tehran called for boosting cooperation between the two countries on renewable energies. "The record of cooperation between Iran and Czech Republic dates back to a long time ago and we are currently cooperating on the construction of Khoda-Afarin hydroelectric power plant in Northwestern Iran," Chitchian said. Chitchian and Sobotka also discussed the capacities and capabilities of the two countries in the water and electricity sectors. The Iranian energy minister welcomed participation of the Czech companies in financing or constructing waste-fuel power plants in Iran.  - Fars


Enma Sets Up Fund for Saudi Mixed-Use Complex

Saudi-based Al Enmaa Investment Company said it has set up a new real estate development fund to build a residential and commercial complex near the Al Haramain train station in the port city of Jeddah at an investment of SR4 billion (US$1.06 billion).

The Darb Al Haramain complex will come up on a 1.38 million sq m area on the intersection of King Abdullah Road and Al Haramain Train Station in the old airport area of Jeddah city, said the company in a statement.

The work began on the project last December and the marketing and selling of units is likely to start early next year, it stated.

The complex has a modern unique structure that was designed by architecture group Hossam Al Abdulkarim in alliance with global industry giants US-based Cal Thorpe, Kranekel, and Canadian company WPS.

Al Enma has signed up Saqefat Al-Safa Real Estate Development and Management Company to undertake the implementation and marketing of the project, it stated.

On the new project, CEO Saleh Al Hanaki, said: "The complex, regarded as the most important residential and commercial complex for Al Haramain Train Station visitors, is expected to be completed in 2018."

"The complex design stands to be the first-of-its-kind when compared to other similar projects in Jeddah, as it is structured with seven floors (services + 5 identical residences + an appurtenance) with the minimum number of 60 floors for the residential buildings within the complex, and located directly on King Abdullah Road," revealed Al Hanaki.

In addition, the main road named “Al-Hijaz Road” was constructed to divide the complex from the west to the east, with buildings along the sides ranging from 20 to 60 floors each, he stated.

"The complex also includes a large central park and medium-size gardens that obtain all the sports and entertainment activities, as well as services amenities for the residences of the complex," he added.

The supervision and implementation of the project has been assigned to The Arab Center for Engineering Consultancy, a specialist in the field of engineering consultancy in Saudi Arabia for nearly 30 years with several major projects to its credit across the kingdom.

Darb Al Haramian complex will be a major facility catering to the Al Haramian station visitors. It will have access to high-level road networks as well as Jeddah metro stations, allowing major commercial and touristic interchange in the area.

According to Al Hanaki, the Sulaymaniyah main station in Jeddah is the most important railway station of the five connecting Al Haramain train station, as it links the departure and arrival of a huge number of users, which calls for an urgent demand of houses, hotels and various commercial projects.

Darb Al Haramian complex will be a major facility catering to the Al Haramian station visitors. It will have access to high-level road networks as well as Jeddah metro stations, allowing major commercial and touristic interchange in the area.

According to Al Hanaki, the Sulaymaniyah main station in Jeddah is the most important railway station of the five connecting Al Haramain train station, as it links the departure and arrival of a huge number of users, which calls for an urgent demand of houses, hotels and various commercial projects.

The residents of Darb Al-Haramain will able to travel in these high-speed trains completing the Al Haramain-Makkah journey within a record 21 minutes, and to Madinah in 90 minutes.

"This means they will enjoy the possibility of visiting the Holy Mosques on daily basis and at ease," remarked Al Hanaki.

He pointed out that owing to the surge in visitor numbers, there will be a need of 17,000 hotel rooms during the first five years of the train’s launch and its commercial services or activities.

"A total of 1.5 million visitors and pilgrims are expected to travel through Darb Al Haramain residential, accommodation, or commercial projects, benefiting from all the surrounding facilities, especially Al Haramain Train Station, King Abdulaziz University, its hospital, and all the vast commercial centers that are surrounding the location," he added.


Business Confidence Index in Bahrain Gains in Q2-2017

The business confidence index in Bahrain has amounted to more than 19.91 positive points in the second quarter of 2017, according to a survey conducted by the Information & eGovernment Authority (iGA). The survey measures indexes of investors’ confidence, evaluate the current situations as well as expectations of their future performance and activities in Bahrain.

About 41.8% of institutions expressed their optimism in the continued improvements of the business commercial environment performance as well as its activity during the upcoming period. On the other hand, 49% of respondents expected business conditions to remain at the same pace, while 9.2% of institutions expressed dissatisfaction towards their future situation and trade.

As for opinions of institutions of their situation during the first quarter of 2017, the survey showcased that 24.8% of institutions expressed their satisfaction with the performance of their work while 17% of these institutions were dissatisfied during the first quarter of this year. Survey results also comprised the measuring of confidence in business environment according to the size of the institution, sector, industry as well as type of investment.

The implementation of this survey comes in line with the series of economic survey studies that the directorate executes on regular basis; some of which include the implementation of the foreign investment survey project supported by Bahrain’s Economic Development Board (EDB) - the general authority with the role of attracting foreign investments to the Kingdom along with supporting initiatives that contribute in improving the investment environment in the country. The role of EDB is to work with the government, current and potential investors so as to ensure the capability of Bahrain’s investment environment in attracting and sustaining them.

The survey aims at providing the necessary information for investors as well as decision-makers, economic policy makers to facilitate the process of appropriate decision-making and execute the resulted procedures. These procedures ensure the creation of suitable environment to attract and execute the resulted procedures while ensuring suitable environment to attract more investments as well as enhance the competitive capability to continue the growth of the business sector by providing real indexes to measure the investors’ confidence level in addition to size of enterprises, sector, industries and type of investments.

Business Confidence Indexes based on opinion polls, within the commercial environment and are being conducted by iGA across a sample, represent the commercial institutions and comprise micro-enterprises to large-scale enterprises classified as foreign or local investments and own huge capital or has foreign shareholders.


Grid Inter-Connectivity to Net Savings for GCC

Grid inter-connectivity between the GCC countries will generate US$33 billion in investments, economic and energy savings for the bloc over the next 25 years, data was cited from leading global consultant Dun & Bradstreet.

The GCC Interconnection Authority (GCCIA), which owns and administers the super grid interconnecting the national grids of individual member states, had reported that the grid interconnection contributed more than US$1 billion in savings to the GCC states over the past three years, it said.

In 2016, the power trading volume in GCC region surged to 1.32 million MW with participation of five of the six member states in trading activity and concluding more than 15 contracts, stated the report citing the GCCIA data.

The GCCIA, a joint stock company subscribed by all the six member countries, is now working on development of power market in the GCC region. Towards this, the Authority held discussions with power exchanges around the world with proven track record in handling cross border power trade.

On December 31, 2001, the GCC countries agreed to establish the GCCIA for interlinking the national power systems. In 2002, the authority made history by initiating its business through employment of staff, undergoing pre-qualification exercise, and the hiring of a consultant to conduct the tendering of the project, said the report.

In 2005, some 14 contracts were awarded totaling more than US$1 billion. Project execution began in November 2005 and ended in early 2009, where operations commenced. The project was segregated into three phases: The first phase, which interconnected Kuwait, Saudi Arabia, Bahrain and Qatar; the second phase is the internal integration of the UAE and Oman power systems; and the third phase to connect phase one with phase two, stated the report.

The first phase member states were connected and have recently engaged in power exchanges amongst themselves. Future prospects will engage the authority in market operations between the GCC countries and hence create a regional power market exchange, it added.


Iran, China Opt for Boosting Strategic Relations

Iranian Deputy Foreign Minister Ebrahim Rahimpour and his Chinese counterpart in a meeting in Beijing underlined the need for boosting mutual cooperation between the two countries, especially in the strategic fields. During the meeting in the Chinese capital on Thursday, Rahimpour and his Chinese counterpart explored avenues for bolstering and reinvigorating bilateral relations. "Iran’s policies are based on bolstering and broadening strategic relations with China," Rahimpour said, adding that drawing up a four-year plan is needed to help further expand relations between the two countries. The meeting on Iran-China political consultation mechanism kicked off in China on Wednesday.

During the meeting, Rahimpour said the two countries had a very good relations during the economic sanctions, and called for further expansion of cooperation mainly after the implementation of the Joint Comprehensive Plan of Action (JCPOA). Referring to the plan named “One belt – One road” initiated by Chinese president, he highlighted the status of the Islamic Republic of Iran in this significant economic program and called China to expedite joint economic projects. "Tehran and Beijing should broaden cooperation in economy, politics, culture and security," he said.

In relevant remarks earlier in May, Chinese Finance Minister Xiao Jie in a meeting with his Iranian counterpart Ali Tayyebnia in Beijing underlined that Iran can play an important role in the revival of the Silk Road. During the meeting in the Chinese capital, Xiao said Iran has played an active role in various projects and also helped with the implementation of many projects in other countries. The Iranian and Chinese ministers of economy and finance met on the sidelines of ‘New Silk Road’ summit in Beijing to discuss economic cooperation and help remove the existing obstacles. The two sides discussed Chinese banks’ financing of Iran’s infrastructure projects as introduced to them by the Iranian side. - Fars


Iran, Turkey Stress Boosting Trade

Iranian and Turkish Presidents Hassan Rohani and Recep Tayyip Erdogan in a phone conversation underlined the necessity for Tehran and Ankara to increase the volume of their trade exchanges considerably. During the telephone talks on 24 May 2017 , President Rohani lauded the developments made in two countries' relations, and stressed promotion of annual trade exchanges between the two states to the targeted goal of US$30 billion.

He also called for the improvement of banking relations between Iran and Turkey, and said that bilateral and trilateral relations between Tehran, Ankara and Moscow can help establish peace and stability in the region. President Rohani congratulated the coming of the holy month of Ramadan to his Turkish counterpart, and wished health for Erdogan and prosperity for the Turkish nation. Erdogan, for his part, congratulated his Iranian counterpart on his re-election, adding that Ankara is committed to reinforce all-out ties with Tehran.

Iran-Turkey relations are promotional and Ankara attaches importance to improvement of ties with Tehran, he noted. There are no obstacles on the way of elevation of Iran-Turkey relations and realization of US$30 billion trade target, Erdogan said. “We showed our commitment to boost ties in the previous Iran-Turkey Supreme Council on Strategic Cooperation,” he added. Erdogan pointed to the regional cooperation between Iran and Turkey, and said that the two countries’ cooperation in Syria talks held in Astana can help establish peace in the region. “We can speed up Astana talks for resolution of the Syrian crisis with the participation of Russia and other countries,” he added. The Iranian and Turkish presidents also called for holding Iran-Turkey Supreme Council on Strategic Cooperation meeting in the near future.

In a recent development on Monday, Iranian Deputy Foreign Minister Ebrahim Rahimpour and his Turkish counterpart Sedat Onal in a meeting in Tehran underlined the need for expanding bilateral ties in different fields. During the meeting, Rahimpour and Onal explored avenues for bolstering and reinvigorating mutual cooperation in political, economic and cultural fields. The Iranian deputy foreign minister said that both Iran and Turkey are considered as important countries in the region, underlying that expansion of mutual ties would pave the way for resolving the regional crises. Onal, for his part, congratulated Hassan Rohani's re-election as Iran's president, and underlined that what happened in Iran was a manifestation of democracy. The Turkish official said that the high voter turnout indicated that the Iranian nation is determined to decide their own fate. - Fars


Scandinavian Countries Seek to Liberalize Iran Air Travel

Norway, Denmark and Sweden will negotiate with Iran on 29-30 May 2017 aiming to modernize and liberalize commercial air travel agreements, the Norwegian Ministry of Transportation and Communications said in a statement on Friday (26 May 2017). Top Scandinavian carriers SAS and Norwegian Air Shuttle currently do not fly to Iran. - Reuters


Putin Discusses Economic Ties with Iran's Rohani

Russian President Vladimir Putin and Iran's Hassan Rohani held a phone call in which the two leaders stressed the need for more joint efforts to resolve the Syria crisis and discussed economic ties, the Kremlin said on Saturday (27 May 2017). The Kremlin added that Putin congratulated Rohani on his recent election win. It clarified that the economic issues discussed included joint projects in the oil and gas sector and peaceful nuclear projects. - Reuters


Iran Planning on Raising Oil Output through Contracts with Majors

Iran hopes to sign groundbreaking deals with oil majors such as Total and Lukoil this year as the re-election this month of reformist Hassan Rohani to the presidency should boost investments. Iran's veteran oil minister, Bijan Zanganeh, told Reuters in an interview that he saw his country adding around a quarter to its production capacity in the next five years thanks to new projects with international companies.

The development of new fields as well as improved oil recovery from mature reservoirs should allow Iran, OPEC's No.3 oil producer, to have the capacity to pump 5 million bpd, or 5% of global crude, versus 4 million bpd now.

Gas condensate output capacity should increase to 1 million bpd from about 600,000 bpd now. "One important step was the election, because in this election Iranian people said 'yes' to positive interaction with the world," Zanganeh said in Vienna after a meeting of the Organization of the Petroleum Exporting Countries.

"I hope this message will be understood positively ... especially by the superpower in the world," he said in a clear reference to the United States, which has had sanctions against Iran since the 1979 Iranian revolution.

"It is not the time to trigger actions against Iran," he said. US President Donald Trump has threatened to impose new sanctions against Iran. "It (the election) is a very clear message to the world. More than 60%-65% of Iran's young people, middle-class people, university students, sent this message. I hope the world receives it positively."

"Given the outcome of the elections, it is time for the US to change its stance against Iran. We have no problem with US Companies taking part in our oil and gas projects. The US government limits these companies. Many European and Asian companies are entering Iran and they are to sign agreements and contracts with Iranian firms."

"Chinese, Japanese, Korean, French, and even British companies are signing contracts with us; only American firms can't enter Iran and I don't know the reason why. I think the present policies by the US are against the interests of its international oil producing companies."

Zanganeh said he hoped Iran would sign oil deals this year with France's Total, Russia's Lukoil as well as Danish Maersk and maybe Indonesia's Pertamina. Talks are focusing on the development of fields such as South Azadegan Oil Field, Yadavaran Oil Field, West Karoun, Mansouri-Bangestan Field, and Ab-Teymour Field and the South Pars Oil Layer.

Production from West Karoun has reached 300,000 bpd, Zanganeh said. "Since the start of production in this region, crude produced from these fields have been exported. Only a small part of this crude fed Abadan Oil Refinery."

"Iran's export markets are to experience variety in the future. The fall in April and May-exports were due to operational matters. There is no problem in production. We currently export 2.1-2.2 million bpd of crude. Our policy is to increase our export destinations. We don't want to export to just 2-3 countries in Asia, like before."

He said the rise in Iran's production capacity should not derail cooperation with OPEC, which asked its members to curb output for another nine months to fight a global oil glut. "All OPEC decisions are short-term decisions. Production capacity is part of our long-term plans," Zanganeh said.

The minister spoke of the OPEC agreement and continued: "Any decision made by OPEC on extending the production cut will be respected by Iran. We are ready to support any of OPEC's output cut plans, including the 6-month, 9-month, and 12-month cuts. However, right now, there is not talk of further cutting production. For now, I think the best for the market would be to maintain the status quo. We are for extended what we have agreed upon before."

Zanganeh, who clashed with Iran's arch-rival Saudi Arabia at many previous OPEC meetings, said he was positively surprised by good cooperation within the organization, its partnership with non-OPEC Russia as well as solid OPEC and non-OPEC compliance with output cuts.

"After more than two years, I think it's the first time we had a smooth meeting without any issue. I have been in OPEC close to 20 years, it's the first time that I witness 100% compliance from OPEC and close to 100% from non-OPEC". – Reuters, Fars, Shana


Spanish Firm Interested in More Cooperation with Iran

At the ceremony of signing CRA pipes contract between Spain's Tubacex and Iran's Isfahan Steel Company, the oil minister Bijan Zanganeh said that CRA pipes were extremely difficult to obtain while sanctions were still in place. An agreement between Iran and Western powers led to a number of sanctions being lifted in January 2016 in exchange for curbs on the country's nuclear program. "If sanctions were still in place we would not have been able to sign such a deal," Zanganeh said. He said that the signing of the deal had been delayed until after Iran's presidential election so that the oil ministry would not be accused of trying to sway the results. 

Anton Azlor, a Tubacex director, said the deal had taken approximately a year and half to negotiate and that the company is interested in doing more work in Iran. "Our work in Iran will not end with the production of 600-km pipes and we are thinking of making investment and cooperating with local companies."

Also present at the ceremony, Managing Director of the National Iranian Oil Company (NIOC) Ali Kardor said that once the technology for the production of CRA pipes is transferred to the country, Iran will be recognized as the first manufacturer of these pipes in the region. He explained that so far, contracts have been signed on 7 groups of the total 10 commodity groups to be locally constructed. Once the CRA production contract is implemented, Iran’s capacity will reach 100% from the current 0% in this area, he noted. To implement the contract, Isfahan Steel Co. will construct a new complex, Kardor remarked. Also, 2 complexes will be constructed in Kish with 50-50 cooperation between Isfahan Steel and Spain's Tubacex.

Moreover, Managing Director of Isfahan Steel Company Mohammad-Ali Jan-Nesari appreciated oil minister's efforts in this area, stating that the company had put on its agenda the localization of CRA pipes years ago and presented the proposal to NIOC previously.  - Reuters, Shana




Iran Tops OPEC Nations in Q1 Oil Revenue Increase

Iran’s oil revenue has increased about US$15 million per day in the first quarter of 2017 compared to the last quarter of 2016, Bloomberg reported citing International Energy Agency (IEA). IEA has recently released data for changes in oil revenue from Q4 2016 to Q1 2017, according to which Iran has topped OPEC nations like Saudi Arabia and Iraq in terms of positive changes in oil revenues.

According to Bloomberg, although at first glance it seems that OPEC’s cuts haven’t worked, global oil inventories remain well above normal levels. “But the policy’s made a difference where it really counts: juicing the coffers of finance ministries from Baghdad to Caracas.”

The International Energy Agency, which advises rich countries on oil policy, said earlier this month that OPEC has a “financial motivation to extend the supply cuts.” The IEA calculates the cartel earned almost US$75 million extra a day in the first quarter of this year than in the last quarter of 2016, despite collectively cutting output to 31.9 million bpd from 33.3 million bpd. Consultant IHS Markit said Russia, the largest country outside the cartel to join the cuts, also earned more.

OPEC and its allies believe they can continue earning more while pumping less. Even those countries that question whether an extension can re-balance the market and bring down elevated stockpiles don’t oppose an extension. While oil ministers have a sense of defeat in their battle against high inventories, finance ministers are happy, one OPEC delegate said. – Fars, Tehran Times


Development of South Pars 17-18 Leads to Increased GDP: Iranian Official

Managing Director of Industrial Project Management of Iran (IPMI) Hassan Boyeri said commissioning SP Phase(s) 17-18 has led to a 2% increase in the GPD, achieving an annual revenue of US$3.4 billion. According to him, the value of refinery products in phases 17-18 has been US$2.885 so far. - IRNA


Emirati Carrier Becomes Official Airline of 2019 Special Olympics

Etihad Airways has been unveiled as the official airline partner of the 2019 Special Olympic World Summer Games, an event that will bring more than 7,000 athletes from 170 nations to Abu Dhabi in March of that year. Special Olympic athletes from the UAE and Etihad Airways Emirati cadet pilots attended a special signing event today (May 25) at the headquarters of Adnoc (Abu Dhabi National Oil Company), another 2019 Special Olympics World Summer Games sponsor.

The announcement was marked by the signing of a Memorandum of Understanding by Mohamad Mubarak Al Mazrouei, chairman of the Etihad Aviation Group board, and Mohamad Abdulla Al Junaibi, chairman of the Higher Committee of the Special Olympics World Summer Games.

Peter Baumgartner, chief executive officer, Etihad Airways, said: “The 2019 Special Olympic World Summer Games is a remarkable opportunity to showcase our Abu Dhabi home to these phenomenal athletes as they compete on the highest stage. Everyone at Etihad Airways is immensely proud to be supporting the Special Olympics World Summer Games which will be hosted in the Middle East region for the first time.

“The partnership with the Special Olympics is a key element of Etihad Aviation Group’s extensive social activity program which, in turn, feeds into the Abu Dhabi Economic Vision 2030. We look forward to working closely with all of our partners to make the 2019 Special Olympics World Summer Games a truly memorable occasion.”

The national airline of the United Arab Emirates will carry athletes, equipment, coaches, dignitaries and world media to its Abu Dhabi home for the event in March 2019. The airline will be supported by Hala Abu Dhabi, Etihad’s destination management company, and Etihad Cargo.

A wide program of support and engagement will be developed in the lead up to the event to ensure everyone coming to the 2019 Special Olympics World Summer Games has the best experience while in the UAE’s capital city.

Peter Wheeler, chief executive officer, Special Olympics Abu Dhabi 2019, said: “We are incredibly excited and grateful to be working alongside Etihad Airways for this prestigious sporting event.

“Etihad’s support will help ensure we put on a world class event in 2019 and allow us to reach further with our message of inclusivity, tolerance and philanthropy. These three key pillars will empower not only our athletes, but people of all abilities across the UAE.”

Abu Dhabi will be the first city in the Middle East to host the global event that will bring together more than 7,000 athletes from 170 nations, making the Special Olympics World Summer Games the largest sporting and humanitarian event of 2019.

The athletes will be accompanied by 2,500 coaches and delegates, to compete in Abu Dhabi between 14 and 21 March 2019.

Football, swimming, athletics, cycling, golf and powerlifting are amongst the 22 sports that feature over the competition and other events which include a Global Policy Summit and Global Youth Summit.


GE's Saudi JV to Start Gas Turbine Production

General Electric's joint venture to manufacture gas turbines in Saudi Arabia will start production by the end of the year, the chief executive of its state-backed Saudi partner said on Thursday.

GE and Saudi industrial development company Dussur signed an agreement on Wednesday to set up the one billion riyal (US$267 million) joint venture in the eastern city of Dammam.

Dussur CEO Rasheed al-Shubaili said manufacturing of GE's H-Class turbines in Saudi Arabia would start before the end of the year with the first turbine to be completed in 2018.

The Saudi made gas turbines would be sold in the country and to international customers, he said in an interview in Dubai.

Dussur, formerly Saudi Arabian Industrial Investments Company (SAIIC), was established in 2016 by state firms Saudi Aramco, Public Investment Fund, Saudi Basic Industries Corporation (SABIC).

It aims to develop industrial sectors in Saudi Arabia as part of the government's plan to create jobs and diversify the oil-dependent economy.

The joint venture followed a memorandum of understanding signed last year by GE and Dussur that is expected to draw nearly 3.75 billion riyals of investment by the two companies in 2017.

Al-Shubaili declined to say when the joint venture, which is 55% owned by Dussur and 45% owned by GE, aimed to make a profit.

"We're a long-term patient investor. Our investments are going to profitable," al-Shubaili said.

GE and Dussur signed the joint venture agreement days after GE announced US$15 billion of deals with Saudi Arabia during United State President Donald Trump's visit to the Kingdom last weekend.


Nigeria Not Opposed to Eventually Joining OPEC Deal

Nigerian Oil Minister Emmanuel Ibe Kachikwu said on Thursday that conceptually Nigeria was not opposed to joining OPEC production caps but would have to wait and see if production came back to acceptable levels. "We are targeting that by the end of the extension period (9 months) we are trying to prep and finalise repairs of our infrastructure and at that time we would be able to join," he said. "We have to wait and see that the militancy effects are out and the infrastructure is rebuilt and we're back to production," he said.

OPEC and non-OPEC oil producers are gearing up to extend output cuts on Thursday, possibly by as long as 12 months, to help clear a global inventory overhang and to support crude prices.


Venezuela: OPEC Needs to Stabilize Oil Market & Force Inventory

The most important issue for OPEC is to stabilize the oil market and prompt a draw on global inventories, Venezuela's oil minister Nelson Martinez said on Thursday. "The most important issue is to regulate and stabilize the market ... and bring inventories down to their five-year average" Martinez told reporters.

The Organization of the Petroleum Exporting Countries met in Vienna and extended an accord reached in December in which it and 11 non-members agreed to cut oil output by about 1.8 million barrels per day in the first half of 2017. "This is a problem for producers, rather than exporters. For the first time those of us that have oil-producing facilities in our countries are conscious of the need to regulate and stabilize the market ... and lower our production so as to drain inventory levels to their five-year average."

Martinez said Venezuela, which is suffering from deep recession and has seen thousands take to the streets daily in protest, is currently producing around 1.97 million barrels per day of crude.


OPEC Decides to Extend Output Cuts for 9 Months

OPEC decided on Thursday to extend cuts in oil output by nine months to March 2018, OPEC delegates said, as the producer group battles a global glut of crude after seeing prices halve and revenues drop sharply in the past three years.

The cuts are likely to be shared again by a dozen non-members led by top oil producer Russia, which reduced output in tandem with the Organization of the Petroleum Exporting Countries from January.

OPEC's cuts have helped push oil back above US$50 a barrel this year, giving a fiscal boost to producers, many of which rely heavily on energy revenues and have had to burn through foreign-currency reserves to plug holes in their budgets.

Oil's earlier price decline, which started in 2014, forced Russia and Saudi Arabia to tighten their belts and led to unrest in some producing countries including Venezuela and Nigeria.

The price rise this year has spurred growth in the U.S. shale industry, which is not participating in the output deal, thus slowing the market's rebalancing with global crude stocks still near record highs.

By 1050 GMT (6:50 a.m. ET), Brent crude had fallen 1.5% to around US$53 per barrel as market bulls were disappointed OPEC would not deepen the cuts or extend them by as long as 12 months. [O/R]

OPEC oil ministers were continuing their discussions in Vienna. Non-OPEC producers were scheduled to meet OPEC later in the day.

In December, OPEC agreed its first production cuts in a decade and the first joint cuts with non-OPEC, led by Russia, in 15 years. The two sides decided to remove about 1.8 million barrels per day from the market in the first half of 2017, equal to 2% of global production.

Despite the output cut, OPEC kept exports fairly stable in the first half of 2017 as its members sold oil from stocks.

The move kept global oil stockpiles near record highs, forcing OPEC first to suggest extending cuts by six months, but later proposing to prolong them by nine months and Russia offering an unusually long duration of 12 months.

"There have been suggestions (of deeper cuts), many member countries have indicated flexibility but ... that won't be necessary," Saudi Energy Minister Khalid al-Falih said before the meeting.

He added that OPEC members Nigeria and Libya would still be excluded from cuts as their output remained curbed by unrest.

Falih also said Saudi oil exports were set to decline steeply from June, thus helping to speed up market rebalancing.

OPEC sources have said the Thursday meeting will highlight a need for long-term cooperation with non-OPEC producers.

The group could also send a message to the market that it will seek to curtail its oil exports.

"Russia has an upcoming election and Saudis have the Aramco share listing next year so they will indeed do whatever it takes to support oil prices," said Gary Ross, head of global oil at PIRA Energy, a unit of S&P Global Platts.

OPEC has a self-imposed goal of bringing stocks down from a record high of 3 billion barrels to their five-year average of 2.7 billion.

"We have seen a substantial drawdown in inventories that will be accelerated," Falih said. "Then, the fourth quarter will get us to where we want."


Iran to Become Self-Sufficient from Gasoline Imports by March 2018

According to the Iranian Minister of Petroleum, Iran will partly become self-sufficient in gasoline production by the end of 1396 (March 2017-18). Bijan Zanganeh said: "Currently, around 7-8 million liters a day of gasoline is being imported into the country." – Tasnim


EU Gas Oversupplied, Regional Markets in Current Focus: Iranian Official

The EU’s gas market is now oversupplied and exporting Iranian gas to this market is not profitable now either through a pipeline or as LNG, Deputy Oil Minister for International Affairs and Commerce Amir Hossein Zamaninia told Trend May 24. According to him, regional markets are in Iran’s focus currently.

"We should sell gas to global markets, but at this time Iran is not in this situation yet," said Zamaninia. "As holder of the world’s largest gas reserves, Iran needs to develop gas production projects further." "Recently, Iran and Azerbaijan’s SOCAR have agreed on cooperation in development of Iran’s upstream sector. Dozens of foreign companies have been qualified to enter Iran’s upstream sector," he added.

Twenty-nine foreign companies have been qualified by NIOC to take part in Iran’s upstream oil and gas projects and the list is to be expanded. He added that currently Iran can and is working on exporting gas to neighbour states, but there is little gas for exporting to far markets and this is not profitable via pipelines through Azerbaijan, Turkey or other routes. "Economically it is not viable. We plan to involve in European and other markets and export gas through pipeline or as LNG in future."

According to Iran’s five-year national plan, it should increase the gas export to 60 Bcm/y by 2022. Currently, Iran has agreements with Iraq and Oman to supply 28 Bcm/y of gas to these countries. Iran’s gross gas output reached 285 Bcm last fiscal year (ended March 20), but it plans to increase this volume to above 400 Bcm/y by 2022. Zamaninia said that currently the EU markets are oversupplied with gas and the gas price is low, and it is not profitable for Iran to enter these markets in short term.

Charles Ellinas, CEO of the Cyprus-based energy consultancy e-CNHC, told Trend May 23 that gas prices in Europe are too low to make gas export prospects for Iran commercially viable. Ellinas, who is also a non-resident senior fellow with the Atlantic Council and has over 35 years of experience in the oil and gas sector, added that right now gas prices in Europe are under US$5/British Thermal Unit (mmBTU) and are forecast to remain in the range between of US$5/mmBTU and US$6/mmBTU in the long term.

Meanwhile, the price of Iranian gas supplied to Turkey was US$5.8/mmBTU in 2016, Ellinas said. "At such price by the time it reaches Europe it will be over US$7/mmBTU, which would be too high to attract buyers," the analyst said.

Iran should firstly construct a 1,800-km pipeline (on IGAT 9 ) with 17 compressors and raise at least US$6-8 billion worth of investment to connect the South Pars Gas Field to its north-western regions to be able to export gas to the EU through the Southern Gas Corridor, or a new pipeline.

Coming to exporting LNG, Iran has an LNG project, half done, with 10.4 million tons per year capacity, but it needs at least US$6-9 billion of investment to become operational. Gas consumption in the EU increased by 7% in 2016 compared with the previous year to 447 Bcm, of which a third was supplied by Russian giant Gazprom. - Trend