Iran Hits Milestone of 1 Billion Cubic Meters in Gas Production

By Staff, Agencies

Minister of Petroleum Bijan Zanganeh says Iran’s gas production has hit the record high above 1 billion cubic meters a day, a milestone reached three years after the US imposed its most draconian sanctions ever on the Islamic Republic.

Zanganeh was speaking fresh from a three-day petrochemical conference in Tehran where he said gas production has hit 1.04 billion cubic meters a day, up from 670 million cubic meters in early 2020. 

US sanctions have discouraged international energy companies from dealing with Iran, but they have also provided a rare chance for domestic firms to venture into a setting known to be an exclusive specialty of the elite club of companies.

When French oil and energy company Total ended participation in Phase 11 of Iran’s giant South Pars gas field in 2018, China's state-owned energy major CNPC was said to be ready to take over the stake but the company also suspended investment in response to US pressure.

In January 2020, Zanganeh finally announced that Iran’s Petropars would develop Phase 11 of the world’s largest gas field. Drilling work on the first well of the phase began in December.

Phase 11 is the largest of 28 phases of South Pars which currently produces 70 percent of natural gas consumed by Iranian households.

Iran is faced with runaway energy consumption encouraged by massive subsidies provided by the government which is in a race against time to catch up with the rising demand.

Last month, Zanganeh chided residents in Tehran – a megacity of 12 million – over a 15 percent rise in gas consumption.

“The highest fuel consumption in the country is in homes, and I think this is because people think that if they leave the windows open, the corona will go away. Authorities should tell people to close the windows and lower the temperature,” he said.

Dozens of cities across Iran have faced power outages since early January, with social media and news outlets wildly speculating that they might have been caused by bitcoin farms, which they claim, are mostly operated by Chinese companies.

State officials, however, say power used in bitcoin mining is not too high to cause nationwide outages.

The natural gas is the major fuel used to generate electricity in Iran. Historically, the supply of low-cost electricity is a way to grow economies, increase populations and improve the quality of life.

Many producers in Iran are currently reaping the windfall from a record devaluation of the national currency, the rial, to ramp up production and increase exports.

Last year, Iran produced a total of 267 billion cubic meters of gas, averaging 725 million cubic meters a day.

According to Managing Director of the National Iranian Gas Company Hassan Montazer-Torbati, Iran’s total gas production will hit 500 billion cubic meters in 2041.