The 15th Annual APS Conf. In Tehran - Michael Clegg.

Larry Wheeler, a Houston-based Petrochemicals Consultant and until mid-1999 President of Shell Chemicals Arabia, chaired the Fifth Session. The moderator was Dr. Narsi Ghorban, Managing Director of NarKangan GTL Int'l Co. in Tehran.

This session was on upstream gas and pipeline trade. Iranian gas exports by pipeline to Turkey began in December 2001, with deliveries to increase to 10 BCM per annum in 2007, from 3 BCM, under a 23-year contract.

Michael Clegg, of CERA, London, reviewed and analysed four of the strategic options open to Iran in the development and utilisation of its huge resources of natural gas: (1) gas injection into Iran's major oilfields to increase their productivity and overall recovery of oil; (2) replacing oil by gas in the domestic energy economy, allowing more oil to be exported; (3) seeking entry to the international gas market; and (4) exploring new technology options, such as the conversion of gas to liquid fuels.

Glegg said potential issues and uncertainties identified the need for careful planning and timing to ensure that the intensive capital investment programme could be co-ordinated. Economic factors both within Iran, and globally, could affect the programme. Uncertainties in the performance of the oil reservoirs under gas injection to raise the reservoir pressure mean that time-scales for improved oil productivity will be difficult to predict.

He added: "Entry into the international gas business, to exploit further the large gas resource in Iran will face considerable competition, but the favorable location of the resources for reaching the potential markets in South Asia and the Far East should overcome the absence of any significant track record in the international gas business".

Dr. E. Bavarian, Acting Director for Planning at NIOC, gave a comprehensive overview of oil and gas development. Highlights were Azadegan, with recoverable oil reserves estimated at 4.5 billion barrels (25 billion barrels in place) was the largest new oilfield in 30 years.

Iran's total oil reserves now were 98.9 billion barrels, 9.5% of the world's total.

Central Asia oil swaps (Turkmenistan) will reach 120,000 b/d in 2004, rising to 370,000 b/d later. Iran's own Caspian oil reserves were estimated at 2.5 billion barrels.

By 2015 another 860,000 b/d increase in Iran's oil production capacity is expected. Total oil production capacity in Iran by that year will reach 5.85 million b/d.

South Pars is 40% of total Iranian gas reserves of 26.6 TCM and studies are now under way for North Pars. Gas production from South Pars are to commence in March 2002, with TotalFinaElf having completed the first part of the offshore field's Phases 2 and 3. (Phase 1 is yet to be completed by a local company).

Current research projects include CNG, with Iran also having four different LNG export ventures and GTL/DME projects under planning.

Mark Baxter, Director of the Maguire Energy Institute of Texas, said there were major risks involved in any mega world-class development of natural gas. The Sept. 11, 2001 events have now introduced "a risk that elevates our awareness on how vulnerable a project is to terrorist disruptions. These acts can lead to tragic consequences to human life and catastrophic impact to our environment.

In 1999, Baxter noted, 20 percent of the gas the world consumed was traded across international borders, as compared with 50 percent for oil. The Middle East holds 65 percent of global oil reserves and 35 percent of gas reserves. "When people and nations gravitate to a common goal, a goal that extends beyond the borders of their beliefs and sovereignty, then projects can occur to benefit the overall good of mankind".