page_title: Petroleum industry in Iran
section_title: Natural gas
hierarchical_section_title: Petroleum industry in Iran / Natural gas
caption_attribution_description: English: Iran natural gas production (red) and exports (black), 1960-2012
context_page_description: Iran is an energy superpower and the Petroleum industry in Iran plays an important part in it. In 2004 Iran produced 5.1 percent of the world's total crude oil, which generated revenues of US$25 billion to US$30 billion and was the country's primary source of foreign currency. At 2006 levels of production, oil proceeds represented about 18.7 percent of gross domestic product. However, the importance of the hydrocarbon sector to Iran's economy has been far greater. The oil and gas industry has been the engine of economic growth, directly affecting public development projects, the government's annual budget, and most foreign exchange sources.
  In FY 2009, the sector accounted for 60 percent of total government revenues and 80 percent of the total annual value of both exports and foreign currency earnings. Oil and gas revenues are affected by the value of crude oil on the international market. It has been estimated that at the Organization of the Petroleum Exporting Countries quota level, a one-dollar change in the price of crude oil on the international market would alter Iran's oil revenues by US$1 billion.
context_section_description: In addition to the natural gas associated with oil exploration and extraction, an estimated 62 percent of Iran's 32.3 trillion cubic meters of proven natural gas reserves in 2006 were located in independent natural gas fields, an amount second only to those of Russia. In 2006 annual production reached 105 billion cubic meters, with fastest growth occurring over the previous 15 years. In 2006 natural gas accounted for about 50 percent of domestic energy consumption, in part because domestic gas prices were heavily subsidized. Natural gas production will reach 700 million cubic meter/day by 2012 and 900 million cubic meter/day by 2015.
  Since 1979, infrastructure investment by Iranian and foreign oil firms has increased pipeline capacity to support the Iranian gas industry. Between 1979 and 2003, pipelines to transport natural gas to refineries and to domestic consumers increased from 2,000 kilometers to 12,000 kilometers. In the same period, natural gas distribution pipelines increased from 2,000 kilometers to 45,000 kilometers in response to growing domestic consumption. Gas processing plants are located at Ahvaz, Dalan, Kangan, and Marun, in a corridor along the northern Persian Gulf close to the major gas fields. South Pars, Iran's largest natural gas field, has received substantial foreign investment. With its output intended for both export and domestic consumption, South Pars is expected to reach full production in 2015. However, delays and lower production in the Iranian side due to sanctions is resulting in migration of gas to the Qatari part and a loss for Iran.
  The output of South Pars is the basis of the Pars Special Economic Energy Zone, a complex of petrochemical and natural gas processing plants and port facilities established in 1998 on the Persian Gulf south of Kangan. Iran is able to produce all the parts needed for its gas refineries. Iran is now the third country in the world to have developed Gas to liquids (GTL) technology.
  In the 1980s, Iran began to replace oil, coal, charcoal, and other fossil-fuel energy sources with natural gas, which is environmentally safer. The share of natural gas in household energy consumption, which averaged 54 percent in 2004, was projected to increase to 69 percent by 2009. Overall, natural gas consumption in Iran was expected to grow by more than 10 percent per annum between 2005 and 2009.
  With international oil prices increasing and projected to continue increasing, international demand for natural gas and investment in production and transportation of natural gas to consumer markets both increased in the early 2000s. Iran set a goal of increasing its natural gas production capacity to 300 billion cubic meters by 2015 while keeping oil production stable. To achieve this capacity, the government has planned a joint investment worth US$100 billion in the oil and gas industry through 2015.
  Market value of Iran's total natural gas reserves at comparative international energy price of $75 per barrel of oil stands at ~US $4 trillion. Following the discovery of a large gas deposit in the Caspian sea (The Sardar Jangal gas field) in 2011 estimated at 50 trillion cubic feet (some 1.4 trillion cubic meters), Iran could rank first in the world in terms of gas reserves. In addition, Iranian media have reported in 2012 the discovery of gas field "as big as South Pars gas field" in the oil-rich Khuzestan province. In 2011, Iran signed a contract with Baghdad and Damascus in order to export Iran's gas to Iraq, Syria, Lebanon, the Mediterranean region and eventually Europe. Oman and Kuwait were negotiating an import agreement in 2014. Once all pipelines become operational, Iran can potentially export a total of more than 200 million cubic meter of natural gas every year to Iraq, India, Pakistan, and Oman.
caption: Iran natural gas production (red) and exports (black), 1960-2012
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