Iran seeks $100 billion for gas

Iran needs $100 billion to rebuild its gas industry and has met with European energy giants as an end to decades of international sanctions looms. While commodity markets fixate on a return of Iranian oil, the importance of gas in the longer term was underlined as BP data showed the country held its position as the nation with the largest proven reserves of the fuel after snatching the crown from Russia in 2011.

Hamid Reza Araghi, Deputy Oil Minister met with international companies at the World Gas Conference adding that half of the $100 billion that Iran requires will need to come from foreign producers.

The prospect of renewed fossil-fuel supplies from Iran is one of the great unknowns for global energy markets already shaken by surging US shale output and Saudi Arabia’s decision to keep pumping oil even as prices collapsed.

If a final agreement on Iran’s nuclear program is reached by the June 30 deadline and sanctions eased, Iran plans to increase gas exports sevenfold to 200 MMcmd in four years. It wants to raise production to 1.2 Bcmd in five years, from 800 million now.

Iran has plenty of room to increase production. Even though it has slightly larger reserves than Russia, it produced less than one-third of the gas in 2014, BP data show.

Selling gas abroad will be more challenging. Iran has just one half-built LNG export plant, giving few quick routes to export.

Iran has its eyes on a longer-term prize and sees gas as key for nations seeking both cheaper and cleaner energy.