Gas Demand Grows: Extensive utilization of natural gas is regarded as a pillar for a sustainable development and also the choice fuel of the present century. Due to its inherent peculiarities and suitability with clean environment, natural gas is an energy carrier that is set to attract the highest rate of global demand growth compared with other carriers. This rate is predicted to be about 3.2% annually for the next two decades which is the highest for an energy carrier. It is indicative of the fact that the share of natural gas in the energy basket of the world is rising constantly.
The reality is that such forecasts are only based on the status quo and do not take into account the extensive worldwide research studies being carried out to enhance utilization of gas.
A huge demand for natural gas will be in place once using products of Gas to Liquid (GTL) process makes economic sense and natural gas products make favorable replacements for transportation fuels.
Additionally, the adverse effects of the present energy consumption mode on the environment and the rapidly growing global demand for electricity seem to require increased global efforts for replacement by natural gas.

Fortunate Fuel: Fortunately, the proven natural gas reserves of the world are quite capable of meeting the rising demands. But most such reserves are not close to the consumption centers. Therefore, in order for the consumers to gain easy access to natural gas and to achieve sustainable development, the enhancement of international cooperation, and especially joint investment amongst producers and consumers is inevitable.
Natural gas pipelines will not only meet the needs of the consumers, but can also help promote peace and friendship among nations. The proven natural gas reserves of the Middle East, only second after those of the FSU, enjoy an undeniable opportunity to bolster the region’s position in the global gas market.

Iranian Strategy: The Islamic Republic, sitting on 26.3 trillion cubic meters of proven natural gas reserves, some 18% of that of the entire world, can have a decisively significant role in meeting good parts of the future demand of this energy carrier. As a result, Iran has decided to increase its present production of 300 million cubic meters to 500 million cubic meters by 2005. Fortunately, the outcome of the exploration projects of the recent years show that there exists great potential of natural gas reserves to be explored.
The geopolitical situation of Iran creates many good opportunities for gas swaps, linkages and cooperation between the major producers of natural gas and the consuming nations. Furthermore, the natural gas reserves of Iran are almost equally divided between onshore and offshore fields. This gives rise to significant flexibility for investment and development in the sector. Despite all these potentials, Iran’s share in the global natural gas production is less than 3%. And that is exactly why Iran has embarked on enormous efforts, in both upstream and downstream sectors, to increase its production and to meet the growing domestic, regional and universal demands for natural gas.

Powered by South Pars: The huge drive to tap the potentials in the gigantic South Pars field is one such endeavor. Developments of various phases of this field have priority and are being pursued with great vigor, which will pave the way for Iran’s strong presence in the near and distant markets concurrently.
From among phases 1 to 10 of South Pars field, each of which is expected to produce one billion cubic feet of gas per day, the development operations of phases 1 to 8 are being carried out. Hopefully, the first unit of phases 2 and 3 will be operative before the end of the current Iranian year (ending 20th March 2002). Other units of the same phases are expected to be completed by September 2002. The development plan of the 1st phase has progressed over 70%, largely carried out by local companies.
The contracts for phase 9 and 10 are expected to be signed by the end of the current year, the productions of which are largely for domestic consumption. Phases 11 and 12 will be devoted to export-oriented LNG and GTL projects.

Good for Neighbors: A top priority of Iran’s energy policy is to supply gas to the neighboring countries through pipelines and for the distant markets, especially the Far East, LNG will be the choice. Besides, the feasibility studies of GTL and DME plans are underway, in collaboration with foreign partners. I would like to emphasize on three points:

1. The Islamic Republic of Iran will welcome any direct foreign investment in these activities and, by putting to good use the new legal measures, is prepared to streamline the regulations to ensure foreign capital attraction.

2. National Iranian Oil Company is essentially interested in pursuing an operation and utilization integration between upstream activities and those of LNG, GTL, and DME. For this purpose, NIOC is prepared to streamline the regulations to ensure foreign capital attraction.

3. In the “Pars Special Energy Zone”, suitable infrastructure for the development of energy-intensive industries, particularly petrochemical complexes, have been put in place. We are prepared to provide them with needed natural gas and facilities at competitive prices and favorable conditions.