By: Ebrahim Fallahi

Iran gas situation: Are power plants facing feedstock shortage?

January 25, 2020 - 13:31

TEHRAN – Following the new wave of cold weather blanketing Iran in recent weeks, natural gas consumption by the Iranian households has hit new record highs, ringing warning bells about possible problems regarding fuel supply to the country’s power plants and industry sector which mainly consume natural gas.

Considering the remarks made by senior officials at the energy and oil ministries, the amount of daily gas consumption by the domestic sector is touching the total amount of the gas supplied by the oil ministry, and they believe that people should manage their consumption of both gas and electricity to pass through the current condition.

Tehran Times conducted an interview with the Energy Ministry’s spokesman for the power department Mostafa Najafi Mashahadi, to follow up on the issue. What follows is the gist of what we learned.

Supply vs. consumption

Eerier this week, Iranian Energy Minister Reza Ardakanian said daily gas consumption by Iranian households has recently reached about 700 million cubic meters (mcm) which is almost equal to the total amount of the country’s gas supplied by the oil ministry (which is in charge of the production and distribution of the natural gas in Iran). This remarks raised the question about the feedstock of the country’s power plants.

The oil ministry supplies about 700 million cubic meters of gas per day, 520 mcm of which is used in the domestic sector, 90 mcm by the country’s power plants, 50 mcm for exports and another 40 mcm is consumed by the industry sector, according to Ardakanian.

This means that the gas supplied by the oil ministry is only enough to meet the needs of the domestic sector at the moment and the power plants, exports and the industry are left with no supply.

In this regard, Najafi said the oil and energy ministries are in close communication with each other and are taking all necessary measures to manage the situation.

“The oil ministry and its subsidiary companies have increased their supply for the power plants in the past few days,” he said.

Rejecting the idea of the daily consumption surpassing 700 mcm, the official put the country’s current daily gas consumption at about 600 mcm.

However, considering a nearly 600 mcm daily consumption, exports, industry and power plants would, again, have nearly 100 mcm to manage.

Exports and industry sector

With the households’ daily consumption at record high of 600 mcm, and the country’s power plants needing nearly 50 mcm of gas to meet the electricity demand, it appears that the industry and exports would face serious shortages.

Regarding the industry sector, the official explained that to offset some of the power plants’ feedstock demand the energy ministry is also using alternative fuels like fuel oil and gas oil in order to alleviate the situation and manage the probable supply shortages.

So in critical situations like the current one the gas consumption by the power plants is not necessarily 50 mcm per day and could be much less.

Regarding the exports to the neighboring countries, mainly Iraq, with which Iran has agreed to supply a daily amount of 50 mcm, reports indicate that due to the harsh situation inside the country, Iran has decreased its exports significantly to meet its domestic needs.

According to sources close to the Iraq energy ministry, Iran which used to export 25 mcm (approximately 883 million cubic feet) of natural gas to Iraq on a daily basis, has decreased it exports to four million cubic meters in recent months.

So, it seems that with the oil and energy ministries’ arrangements, as long as the consumption doesn’t exceed 600 mcm, there will be no problem regarding the gas supply to both the power plants and the industry sector.

However, like many other officials, Rajabi also called on people to manage and optimize their gas and electricity consumption and help the government in passing through this situation with no serious problems.

EF/MA

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