Copy in clipboard...
NIOC to offer gas field development to steelmakers to produce own energy
The initiative aims to bring energy-hungry industries into the fold, allowing them to take part in production and in turn, alleviate the perennial shortages that have dogged their operations.
Iran’s heavy industries, including steel, petrochemicals, and mining, have borne the brunt of rolling power and gas cuts in recent years, as the government has prioritized household consumption during peak demand periods.
The policy has inflicted billions of dollars in loss annually to their production.
“A plan was devised to allocate two or three gas fields to them so that they can also take part in production and help address some of their energy-related challenges," Bovard told reporters in remarks carried by Mehr News Agency.
Although the official did not name any specific fields, he hinted that they were likely among Iran’s smaller reserves.
According to Bovard, the daily gas consumption of steel companies fell below 50 million cubic meters (mcm), a figure that makes it unlikely they would be tapping into the country’s major deposits.
The daily energy demand accounts for 6% of Iran’s total daily gas production, which stands at around 880 mcm.
The announcement came on the heels of a push by the National Iranian Oil Co. (NIOC), also headed by Bovard, to drum up private-sector interest in its upstream gas assets.
Last month, the energy giant unveiled investment packages for 49 gas fields, aiming to ratchet up daily output capacity by as much as 500 mcm.
Of those, 35 onshore projects would require an injection of over $13 billion, while the 14 offshore fields— largely untapped—would need an estimated $27 billion in capital.
Bovard stressed on Monday that the NIOC was open about financing models for these ventures. “We are even prepared to fully hand over certain fields to the private sector, to ensure maximum participation in investment and production,” he said.
The flexibility signals a departure from Iran’s traditionally state-heavy approach to energy development, and underscores the urgency with which Tehran is trying to close the gap in domestic gas supply—a shortfall that at time reaches 300 mcm per day.
Iran, home to the world’s second-largest natural gas reserves after Russia, is trying to boost extraction.
Under a four-year roadmap, the country plans to ramp up unprocessed gas output from 1.1 billion cubic meters to 1.33 bcm per day.