Iran allowed to export surplus gas to Europe

Iran allowed to export surplus gas to Europe

The Iranian Parliament has allowed the country’s oil ministry to export surplus gas to Europe and neighbouring countries in the next fiscal year, which will start March 2017.

The approval is a part of the next fiscal year’s budget bill which is being discussed at the parliament, IRNA reported.

Under the bill, the Iranian oil ministry should take steps to export gas to the EU and neighboring countries-which are not buying oil from Iran- using the private sector potential, if the gas output surpasses 1,000 million cubic meters per day.

Iran’s gross gas output currently stands at 820 million cubic meters per day, while the country’s commercial gas output reaches 700 million cubic meters per day.

The Iranian parliament approved general outlines of the national budget bill for the next Iranian fiscal year on February 21.

The draft budget bill has put the price of a barrel of oil at $50 for the next fiscal year. Some 20 percent of the country’s oil revenue will go to the National Development Fund.

The draft has predicted that Iran’s revenue from oil exports would stand at 1,100 trillion rials (about $33.3 billion according to USD rate against Iranian national currency envisaged by the draft bill).

The Islamic Republic of Iran, the country with the largest natural gas reserves in the world, strives to sell its natural gas in the European markets soon. However, the country lacks necessary export infrastructure to realize gas sales. There is no transit gas pipeline connecting Iran with the EU. The Islamic state may either construct new pipeline via Turkey or build a connector to the Trans-Anatolian pipeline – TANAP (Turkish leg of the Southern Gas Corridor).

Iran also considers exporting its gas in LNG form. The country is aiming to build LNG facilities within two years.

Head of the National Iranian Gas Company (NIGC) Hamidreza Araqi previously said his country wants to increase its share in the global gas trade from the current 1 percent up to 10 percent, increasing volumes of gas export, including LNG, up to about 60-80 bcm by 2021.