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Iran’s Natural Gas Supplies Are Strained, Hurting Oil Production

According to a report in The Oil and Gas Journal (2/18/08) an extremely cold winter has put severe pressure on Iranian natural gas supplies, which is impacting other parts of their economy.  The weather has increased residential and commercial NG use 18% so that it now consumes 90% of production.

Strained NG supplies have hurt oil production which is (unbelievably) pressurized by injection of, you guessed it, natural gas. The affected oil fields produced 930 kb/d if oil last year.  Gas pressurization is down by 33% - 75%.  The article says, "Some Iranian engineers believe…the overall decline rate for Iranian oil fields is 9 - 11%."

In a sort of domino effect, gas processing plants in some of Iran’s giant offshore gas fields have been diverting the gas from LNG to domestic use.  Thus, Iran’s gas problems will impact their LNG customers in Europe.  For example, Iran recently halted exports of gas to Turkey, blaming a pricing dispute with Turkmenistan.

Apparently, the problem is related not only to weather but also to systems management problems that stem from "rapidly developing downstream uses" that compete for gas supplies with re-injection requirements of oil production.

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This entry was posted on Sunday, February 24th, 2008 at 11:23 am and is filed under Iran, demand for gas, oil supply, supply of gas. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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