Consumption of natural gas as an important energy vector has greatly increased in the country during the past several years. Therefore, one of the important points for optimal management of gas resources is basic planning to meet the high domestic demand for gas. The following article studies the domestic state of gas consumption as well as available plans to meet it.

The economic and environmental features of natural gas have made it an optimal energy vector for energy-consuming sectors of the country so that its share from total energy used by various economic sectors has skyrocketed at an average annual rate of 9.8%. One of the main reasons for this issue is the replacement of natural gas for other forms of fuel, especially in power plants. Study of gas consumption during 1996-2001 would indicate an upward trend peaking at more than 25 billion cubic meters in 2001. During that year, power plants accounted for 36.1% of total gas consumption as the biggest gas consumers.

It must be noted that based on the latest figures, about 67.8 billion cubic meters of natural gas was consumed inside the country in 2001 (excluding gas injected into oil wells). In Iran, household, commercial and public sectors are major gas consumers (taking up about 33% of the total gas supplied). Since use of gas does not require complicated technology it readily replaces other fuels in the household sector as soon as gas supply projects are completed.

The industrial sector is another major gas-consuming sector (accounting for about 16% of consumption). Major industries using natural gas in Iran include chemical, paper, glass, iron and steel, aluminum, copper and foodstuff industries. Low price of the natural gas has made the sector reckless with regard to consumption and the rate of natural gas use by the industrial sector is fairly high.

During recent years effective measures have been taken to increase the price of energy vectors including natural gas to slash its excessive use, especially by the industrial sector. However, due to the lack of competition as well as ineffective supervision over price of goods and production services, dilapidation of machinery and use of outmoded technologies (which consume more energy), any hike in gas price for the industrial sector will be imposed on consumers of the industrial products and will not be effective in reducing the sector’s gas consumption.

Other industrial consumers of natural gas include oil refineries which use it as fuel for some furnaces as well as to feed hydrogen production units. Refineries that do not use natural gas, consume oil, gas and mazut. In 2001, about 2,956 million cubic meters of natural gas was used by oil refineries, which constituted about 4.3% of the country’s total consumption.

It must be noted that petrochemical industries have specific power plants. Arak, Tabriz, Bandar Imam and Razi petrochemical complexes have gas-fueled power plants; Isfahan and Khorasan complexes have steam power plants while Kharg and Shiraz complexes enjoy both types of power plants. At the same time, private petrochemical companies like Farabi, Abadan and Carbon Company of Iran purchase their needed electricity from the cross-country network.

It must be noted that increasing gas consumption by the transport sector would require the establishment of numerous fueling stations for gas-fueled vehicles, but adequate facilities for this purpose are still lacking.

The projects that aim to replace natural gas for other fuels in the transport sector are generally implemented by the Iranian Fuel Conservation Organization (IFCO). Some projects currently underway by the organization include the project for converting 1,000 minibuses and 3,000 buses to CNG or replacement of 100,000 dual-fueled vehicles.

1. Increasing production capacity: To develop gas supply operations and meet natural gas demand in the country, especially during recent years, the National Iranian Gas Company has considered several projects some of which take advantage of buyback facilities. They include the projects for increasing production capacity of Fajr (Kangan) Refinery, developing Khangiran refinery, constructing Ilam refinery as well as the projects for establishing pressure boosting stations and developing high-pressure pipelines.

Following the success of the first buyback project in the gas sector, similar gas supply projects also were projected in the budget, according to which more than 4,630 kilometers of high-pressure transmission lines and 12 pressure boosting stations were to be established. The projects will increase consumption parallel to production and more than 1,500 industrial units, 8 power plants and 32 industrial parks will be covered by gas supply projects.

Based on expert estimates, in addition to developing production capacity during the second buyback project, it would result in about $2.813 billion in savings due to the replacement of natural gas for oil products.

The South Pars Project for developing various phases of the field (7 out of 14 phases) will meet gas demands for the coming years through its capacity to produce one billion cubic meters of gas per day.

2. Taking advantage of storage tanks and using the stored gas when the consumption is at its peak: Underground storage of gas is a practical method for supplying gas when the consumption is at a peak. It will not only reduce cost of gas transfer in the existing transfer system (especially when consumption is low), but also act as an important factor for providing security of energy and gas supply when consumption is at its peak and adjust technical specifications of the future transfer system (diameter of the pipes and creating necessary capacities in pressure boosting stations).

To increase the sustainability factor of the natural gas supply system, underground storage of gas would be a long-term necessity of Iran’s gas industry. Therefore, due attention must be paid to natural gas stores when studying and designing development of gas supply network in any given country.

Natural gas can be stored below the ground in the following ways:

A) Storing gas in depleted natural reservoirs of gas or oil: If adequate capacity and suitable conditions were available, such stores would be the most suitable way for storing natural gas. Converting naturally depleted oil and gas reservoirs to stores of natural gas is preferable to other methods because there are both necessary engineering information for gas injection and taking repeated advantage of them. Also, it is more economical due to the presence of wells and other facilities.

B) Storing gas in ground water reservoirs: In regions where there are no depleted hydrocarbon reserves, depleted ground water reservoirs can be more economical than other methods if necessary conditions are provided. When choosing these reservoirs, due attention must be paid to the degree of porosity, stability and dome layers to resist the pressure and prevent gas leak. Such information can be attained through engineering operations.

C) Storing gas in salt domes: Due to spaces in salt domes, they can be used for storing natural gas. After drilling a well in the salt dome and solving the salt by injecting water and subsequent depletion of salty water, adequate space for storing gas could be provided. To do this, the salt layer must, first, be thick and deep enough; and, secondly, adequate water for solving salt must be provided.

D) Storing gas in old coal reservoirs or mineral pits: In some countries old coal reservoirs, which are no longer usable and enjoy suitable conditions are used for storing gas. Construction of such stores would need complete geological studies.

At present, studies carried out in the country have shown no depleted oil or gas reservoirs, with most of the reservoirs that may become empty in the future to be located in the south of the country, while consumption of natural gas is mainly concentrated in central, northern and western parts of the country.

Iran has taken action for construction of gas reservoirs in salt layers around Qom near the first cross-country gas supply pipeline and the water reservoir of Yurtsha since 1996. Preliminary studies have proven that the salt layer around Qom is not suitable for gas storage due to unsuitable salt masses. Therefore, all subsequent studies were focused on the Yurtsha reservoir. The Yurtsha anticline is located 70 kilometers southeast of Tehran and 40 kilometers south of Varamin. The reservoir’s contractor is KBB Company of Germany.

Feasibility studies show that useful storage capacity at Yurtsha is about 550 million cubic meters per day. Maximum injection at the time of exploitation would be 2.9 million cubic meters per day for the period of 200 days in warm seasons and 9.6 million cubic meters per day during the remaining 128 days. Based on current projections, gas injection into the reservoir would start in early 2005.

Studies have shown that Serajeh gas reservoir has a good potential for gas injection for storage purposes. Studies carried out on the reservoir have shown that it can store about 1.5 billion cubic meters of gas, which can meet the demand in a big city like Tehran during cold season to an acceptable extent.

In addition to storage project in Yurtsha, other projects have been considered in the country. Studies on some reservoirs have been stopped due to unsuitable conditions. The projects have been outlined in Table 2.

Underground gas storage projects of Iran are often in preliminary and feasibility stages. Therefore, they are far from implementation and exploitation.