Iran’s LNG Exports to Neighbour Rise by 400%

LNG & LPG Jetty

Credit: Iran Liquified Natural Gas Co.

Iran’s exports of Liquified Natural Gas (LNG) to Afghanistan have more than quadrupled in the last quarter of year 2019. Over 98,417 tons of LNG was exported to Afghanistan through the Doqaroon border customs, showing a four-time rise in export of natural gas compared to the previous year.

Exports to Afghanistan were only at 44,929 tons in the same period last year. Currently, 10 tanker trucks carry liquefied gas from Doqaroun Border Terminal to Afghanistan on a daily basis. Doqaroon is 18km from the city of Taibad which borders Afghanistan in the Northeastern Khorasan Razavi Province. 

Last month, a senior energy delegation from Iran visited Kabul, in a bid to further increase energy cooperation between the two countries and to further discuss power supply to Afghanistan. Tehran now holds special status in Afghanistan’s energy market, being their main supplier for electricity, oil, oil products and natural gas. This is of great strategic importance for the state as the US is now unable to affect cross-border interactions and trade as it did before.

Tehran will have to look to maintain its relationships with allies especially with the United States threat of sanctions on Iran’s oil industry. Iran is already facing the heat with countries like Turkey; Iran exported $2.82 billion worth of goods to Turkey during the last seven month period, indicating a 37.85% decline from last year. 

Although the sanctions have caused a drop in the country’s crude exports by more than 80%, Iran’s exports of oil products go unfazed, primarily fuel oil used for power generation and shipping, as well as liquefied petroleum gas (LPG), used as cooking gas and petrochemical feed. The oil product sales from the country still remain strong at 400,000-500,000 barrels per day, exceeding the top end of crude export estimates by other analysts of some 400,000 bpd for July’19. Iran’s product exports reached their highest level in August, oil minister Bijan Zanganeh was quoted as saying by a lawmaker after a parliamentary meeting on Aug. 27. “In exports of products we have no problem,” Zanganeh said.

Tehran is also looking to the East, given the US-Sino trade war, to bolster its diplomatic ties with China. Since the early 2000s, China has become Iran’s top trading partner and oil importer. This cooperation has also been extended to arms and President Jinping’s Belt and Road initiative.  In addition to trade, China is a leading investor in the Iranian market. About 100 major Chinese companies invest in Iran’s key economic sectors, especially energy and transportation.

Iran still has huge untapped potential when it comes to natural gas because new discovers are being made in areas like the Caspian Sea, North East, Central Kavir and areas around Aghar and Dalan gas fields as well as the Central Persian Gulf. According to the Exploration Directorate of NIOC, there are about 150 unexplored anticlines in Iran. 

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