Hamid Bord, the head of the Ministry of Oil, recently referred to the challenges of gas supply in winter and raised concerns about the gas imbalance in the country. The overall agreement for gas exchange with Russia and the pursuit of the transit route from Azerbaijan is still dependent on the completion of technical arrangements and cannot be relied upon as a definitive source to compensate for winter shortages.
Gas Imbalance Situation
Iran, possessing the second largest natural gas reserves in the world after Russia, faces a usual imbalance during peak daily consumption of 200 to 250 million cubic meters. The attacks on four gas refineries on March 18 of last year removed about 230 million cubic meters of daily production capacity from the circuit, of which nearly 100 million cubic meters has been recovered. If the remaining 130 million cubic meters of capacity does not return to peak consumption, the pressure from the usual imbalance and lost capacity could reach 330 to 380 million cubic meters per day.
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Industries' Need for Gas
In cold days, increased household consumption puts more pressure on the gas network. According to Saeed Tavakoli, CEO of the National Iranian Gas Company, every degree of decrease in ambient temperature can increase gas consumption by about 25 million cubic meters per day. In the industry, petrochemicals and steel are reported to consume approximately 59 million cubic meters and 45 million cubic meters of gas daily, respectively.
Gas plays a key role as a feedstock for producing basic products in petrochemicals and as an essential material in producing sponge iron in the steel chain. Gas limitations in power plants can lead to a decrease in electricity production, which in turn can reduce production in various industries.
Iran cannot eliminate all energy imbalances in the short term, but it can reduce the costs arising from them through proper planning and management. The warning for the upcoming winter clearly indicates that if decisions are not made today for the simultaneous management of household gas, fuel for power plants, and industrial needs, the shortage of an energy carrier could turn into a chain limitation on production in various sectors of the economy.
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