Iran has the world's largest proven natural gas reserves, but development has been slowed by sanctions; the country relies heavily on natural gas domestically but also aims to export gas through pipelines to neighbors and develop liquefied natural gas export projects. However, low global gas prices and surplus supply pose challenges for Iran's goal of increasing its role in international natural gas trade.

1. Recent Developments in the Iranian Gas Industry
Eurasian Natural Gas Infrastructure Conference – Milan
ENGI ‘17 1
Anthony Way
Ali Ghasemi Javid
June 2017

2. • Iran is the largest proven natural gas reserve holder in the world with 34 TCM, 18.2% share of total world
Natural Gas Reserves
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3. • The gas fields below (there are in excess of 30 gas fields in Iran) also hold large amounts of condensate reserves:
Major Natural Gas Fields in Iran
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4. • South Pars is part of a wider gas field that is shared with Qatar.
• South Pars account for almost 40% of Iran's total natural gas reserves
• The Iranian share of gas field contains approx. 14 Tcm of natural gas, 8% of the world's reserves and more than 18 billion
barrels of condensate resources
South Pars – Iran’s Largest Natural Gas Field
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• Production from phases 1 to 10 was originally designed to be allocated for the domestic market for consumption and
reinjection. South Pars natural gas field is now being developed mostly by Iranian companies
• The field's development entails 24 phases
• At present, Phases 1 to 10, 12 and 15 to 21 are complete and producing about 600 mmscm/d natural gas and 800,000
bbl/d condensate

5. South Pars Natural Gas Phases - Iran
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6. • Iran is the world's third-largest dry natural gas producer, primarily for domestic consumption
• in 2015, Iran produced 192.5 bcm of dry natural gas
Natural Gas Production
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7. • In 2015, Iran consumed 191.2 bcm of natural gas
Natural Gas Consumption
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8. • Iran consumed 267.2 million tonnes oil equivalent of primary energy in 2015, with gas increasing its share of the
domestic energy mix.
Iran’s Primary Energy Consumption
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9. Infrastructure - Iran Gas Transmission Lines
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10. Gas Treating plants 22 (16 in operation)
 High Pressure Gas Trunk Lines 37,000 Km
 Domestic Gas Distribution Network 275,000 Km
 Power Plants Consuming Natural Gas 73
 Cities Consuming Natural Gas 1,052
 Villages Consuming Natural Gas 18,550
 Number of NGVs 3,320,000
 Population Consuming Natural Gas 90%
 Share of Natural Gas in Energy Mix 64%
Gas Infrastructure Summary – Iran is fuelled by Gas
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11. Gas Export from Iran by Pipeline
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Country Volume (bcm/y) Commencement Date Remarks
Turkey 10 2001 In operation
Azerbaijan 0.3 to 0.7 2005 In operation
Armenia 1.1 to 2.3 2007 In operation (barter gas
for electricity)
Iraq (Baghdad) 9 2015 Delayed
Iraq (Basra) 9 2018 Understood finalised
Pakistan 7.8 2015 Delayed
Oman 10 2020 Under Negotiation
Source: Global Energy Market Services Ltd. & NIGC

12. • Iran has vast proved natural gas reserves, capable to be exported to Europe.
• Most of Iran's natural gas reserves are undeveloped.
• Iran is in the process to change its oil and gas contract models to allow international major companies to participate in all
phases of an upstream project, including Exploration, Appraisal, Development and Production. This change will stimulate
the export of Iranian gas to European markets.
• Iran currently accounts for less than 1.5% of global natural gas trade. Major challenges: 1) stable political environment;
and 2) pipeline transit route to European markets.
• Iran also has access to Persian Gulf and Asian Natural Gas Markets, but pricing remains problematic.
• Development of the natural gas sector in Iran has been delayed by international sanctions. Lack of foreign investment
and insufficient financing have resulted in slow growth in Iran's natural gas exploitation
Iran’s Opportunities and Challenges for Exporting Natural Gas to Europe
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13. LNG Projects
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Project Name Shareholders No. Of Trains Liquefaction
Technology
Project Status LNG Production,
MTPA
IRAN LNG NIOC 49%,
NIOCPF 50%,
OilPensionFund
1%
2 Linde Seeking Investors 10.8
PARS LNG NIOC 50%, TOTAL
40%, PETRONAS
10%
3 Axens Stopped 15
PERSIAN LNG NIOC 50%, SHELL
25%, REPSOL 25%
2 Shell DMR Stopped 16.2
NORTH PARS LNG NIOC & CNOOC 4 ? Stopped 20
GOLSHAN LNG NIOC & SKS 2 ? Stopped 10
QESHM LNG Australian Co. 3 ? Stopped 3
Source: Global Energy Market Services Ltd. & NIGC

14. LNG Supply / Demand Outlook is a challenge for Iran
14
Global LNG demand affected by the European
market liberalisation process. Reduced gas
demand (from renewables) coincided with the
regulatory measures introduced by European
governments.
Global LNG prices at lowest levels since
2005. Surplus supply of LNG above
global demand, will be a feature of the
LNG market probably for the next 5 to 10
years.
Global LNG capacity and demand Global LNG prices ($/MMBtu)
Source: Global LNG: EY New pricing ahead-LNG Supply, 2015 Source: Shell LNG Outlook, 2017
Market forecasted to be in oversupply until at least 2020
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15. Mr. Anthony Way
Mr. A. Ghasemi Javid
TWCOG LLP
www.twcog.com info@twcog.com