TEHRAN (PIN) – “Iran LNG Company” Managing Director Ali Kheir-Andish yesterday said four European companies had voiced their readiness to participate in Iran’s LNG project and to purchase the commodity.

European states would need 100 million cubic meters of gas per day by 2010, said Kheir-Andish, adding four international companies from Germany, Spain, and Austria had expressed their preparedness to help implement LNG project and to buy liquefied natural gas from Iran.
“They are eager to make investments in gas producing projects in an attempt to meet their energy need,” said the official.
According to the plan, the LNG output would double every 3.5 years, said the managing director, adding the country would produce some 22 million tons of natural liquefied gas in 2015, 44 million tons in 2018, and about 88 million tons in 2022.
Kheir-Andish predicted that the first LNG package would be injected into market in 2010.
He said negotiations on the finding a financier for the “Iran LNG” project would continue until Dec. of the current year, adding some Asian and European groups had expressed their willingness to finance the project.
Iran has already signed a $585-million contract with an engineering consortium comprising of two Iranian companies and an Italian company to build a treatment or gas sweetening plant for the Iran LNG project.
APS Engineering, a small, private Italian engineering company that has worked for a variety of clients including Eni, the Italian oil and gas multinational, told the Financial Times it was the Italian company in the consortium.
This contract was awarded just days after the design plans for the plant were submitted to Iranian officials by another consortium, made up of a German company, Linde, Hyundai of South Korea, and Snamprogetti, an Eni subsidiary. The design contract was initially agreed as far back as 2002.
Royal Dutch Shell, French giant Total, and Spain’s Repsol have stakes in Iran’s other two main LNG projects, as well.
Oil Minister Gholamhossein Nozari said U.S. sanctions against Iran would have no impact on the country’s crude oil and natural gas production plans.
He added the signing of e-LNG contract conveyed the important message that the country was determined to carry out projects by domestic contractors.
Addressing French President Nicolas Sarkozy, the official warned if the contract of Pars LNG project were not finalized with France’s Total, Iran would implement the project.
He said the Pars LNG contract had not been yet finalized as Iran had not accepted Total’s final investment decision (FID), adding the French company had not voiced its unwillingness to make investment in the project.
“Total, in its proposed FID, has announced that it will invest some 11.2 billion dollars in Phase 11 of South Pars gas field and Iran has dismissed the amount as unacceptable,” said the top official.
He ruled out the news that Total had reached an impasse in Iran’s Pars LNG project.
“Total is keen to implement the project,” said the minister, adding Iran had proposed the French giant to divide the project into smaller packages in a bid to slash costs.
Pointing to huge oil and gas reserves of Iran, the ranking official said the world was in dire need of energy and no company could ignore Iran.
Manager of Total Christophe de Margerie said the giant energy group would press on with talks on Pars LNG, Iran’s first liquefied natural gas export terminal, a project which requires a $15 billion investment, adding Total would look at the political situation only once a deal is ready.
Paulo Scaroni, Eni’s chief executive, told the Financial Times that Eni had ‘no intention’ of pulling out of Iran.
Other companies are, however, taking a bolder stance when it comes to Iran LNG. Union Fenosa, the Spanish energy company, says its subsidiary, Socoin, was awarded a 32.5-million-euro engineering contract for Iran LNG in August.
OMV, the Austrian oil and gas company, in April signed a preliminary agreement with Tehran for a stake in Iran LNG, but this is yet to be finalized.
“Our interest in the Iran LNG project lies on the table,” it said.
E.ON, the world’s largest utility, seeks to buy liquefied natural gas from Nigeria, an E.ON manager told Westdeutsche Allgemeine Zeitung in a story published last Friday.
Dietrich Gerstein, head of E.ON’s LNG purchasing unit, said E.ON was interested in natural gas from Iran.
-------------------------------------- LNG policies
Kheir-Andish said the LNG output in the years to come would depend on Petroleum Ministry’s policies.
Packages 2 and 3 of “Iran LNG” project were signed last Feb., recalled the official, adding a contractor was to be hired for the first package, but the attempt failed and Package 1 was divided into four smaller packages.
He expressed hope that LNG export would be a suitable replacement for oil export through the implementation of “Iran LNG” project.
Kheir-Andish said Package 1 comprised four sections and Iran Power Plant Projects Management Co. (MAPNA) took the responsibility of power plant and electro compressor sections after several sessions and negotiations.
He added e-LNG section constituted 30 percent of “Iran LNG” project and “Iran LNG” project made a 50 percent progress after the signing of contract with MAPNA and the related operations’ progress would soar to some 70 percent when the contract on gas sweetening was inked.
He expressed hope that “Iran LNG” project, due to support from Petroleum Ministry, contractors, and advisors, would become operational by the end of 2010 and the first LNG carrier would ship the first liquefied natural gas cargo at that time.
Given the recent contracts signed for the “Iran LNG” project, the country would export 12 billion dollars worth of LNG per annum and the figure would reduce to 5 or 6 billion dollars in case next contracts were not desirable.
Kheir-Andish said “Iran LNG” project needed a four billion dollar fund and its turnover would amount to six billion dollars.
According to him, e-LNG project was comprised of a combined cycle power plant with a 840 megawatt capacity, subsidiary installations, and six 70MW electro compressors.
LNG carriers
National Iranian Tanker Co. (NITC) managing director said the country would produce over 80 million tons of liquefied natural gas per annum in the upcoming years and 40 LNG carriers would be required to transport some of the product.
Mohammad Suri told PIN that Iran would sign a trilateral contract on the building of LNG vessels and exports.
“Concurrent with the signing of the contract on gas production, LNG plant, and export docks, the contract on the building of LNG carriers should be inked and the issue demands the finalization of LNG contracts,” said the NITC head.
According to Suri, the first cargo of Iran’s LNG would be shipped in 2011 and a 150 thousand cubic meter LNG carrier is needed to transport one million tons of liquefied natural gas.
“Given the plan on production of more than 80 million tons of LNG annually, we have to build at least 40 vessels to carry 50 percent of the product,” reiterated the official.
He added South Korea, Japan, and China were the builders of 90 percent of LNG carriers in the world and Spain and France constructed a limited number of the vessels.
------------------------- LNG carriers
National Iranian Tanker Co. (NITC) managing director said the country would produce over 80 million tons of liquefied natural gas per annum in the upcoming years and 40 LNG carriers would be required to transport some of the product.
Mohammad Suri told PIN that Iran would sign a trilateral contract on the building of LNG vessels and exports.
“Concurrent with the signing of the contract on gas production, LNG plant, and export docks, the contract on the building of LNG carriers should be inked and the issue demands the finalization of LNG contracts,” said the NITC head.
According to Suri, the first cargo of Iran’s LNG would be shipped in 2011 and a 150 thousand cubic meter LNG carrier is needed to transport one million tons of liquefied natural gas.
“Given the plan on production of more than 80 million tons of LNG annually, we have to build at least 40 vessels to carry 50 percent of the product,” reiterated the official.
He added South Korea, Japan, and China were the builders of 90 percent of LNG carriers in the world and Spain and France constructed a limited number of the vessels.