Gas Production and Consumption Imbalance Drives Iran Towards Gas Imports

The imbalance in gas production and consumption, along with a lack of investment in this sector in Iran, has led the security apparatus of the Islamic Republic to follow the issue with greater sensitivity. Private sector activists and experts in Iran believe that Iran will soon become a gas importer. The imbalance and intensifying gas shortage in the country is a topic mentioned in a confidential letter from the Ministry of Intelligence to Ebrahim Raisi, predicting that the imbalance could reach 350 million cubic meters in the coming years. According to a letter allegedly extracted by a hacking group from the internal system of the Iranian presidency, the Ministry of Intelligence opposed the transfer of two gas refineries, Fajr Jam and Parsian, citing security concerns and deeming this action to have significant security and economic consequences. The presidency of the Islamic Republic of Iran has denied any claims of 'hacking the internal system.' Regarding the gas production and consumption imbalance, the head of the Energy Commission of the Chamber of Commerce has stated that the gas imbalance in the country could reach 500 million cubic meters in the next two decades, and optimizing gas consumption in the country will require an investment of 25 to 30 billion dollars, with a return on investment expected in a maximum of 3 to 3.5 years. Arash Najafi, in an interview with ILNA news agency, referenced a report from the Research Center of the Parliament regarding the gas imbalance, stating that if the current methods continue, the country will head towards a crisis, leading to societal dissatisfaction that will challenge the structure and security. He noted that with the current gas consumption trend, Iran will become a 'large gas importer' in a few years and raised the question, 'Do we have the money for gas imports?' Recently, on April 22 of this year, ISNA news agency reported on the state of Iran's gas industry, noting the stability of 'annual gas production' and a likely 'slight' increase, deeming a future 'imbalance' as 'inevitable.' The report's author stated that the continuous 'gas supply' and the regular increase in the number of villages, cities, industrial and production centers, and factories benefiting from gas are the reasons for the 'inevitability' of the imbalance in gas production and consumption in the future. According to this report, 'based on estimates, Iran's production from South Pars will face a decline due to reservoir pressure drop, which should be considered in forecasting the future gas situation in the country.' Furthermore, to maintain current production levels, 'about 80% of the active oil fields in the country, which are in the second half of their lifespan, need significant gas injection to neutralize the negative effects of the natural decline in production from these older fields.' Last year, due to temporary gas cuts to industries, the Iranian economy suffered billions of dollars in losses, with Reza Shahrani, a board member of the Steel Producers Association, stating on January 14, 2023, that 'gas and electricity cuts' in the steel industry would lead to a reduction of '2 million tons of steel production.' Although Iran is one of the countries with the largest gas resources in the world, it has not been successful in utilizing its energy fields, and the existing resources do not fully meet domestic needs. Additionally, the decline in electricity production in Iraq is due to reduced gas imports from Iran, while workers in Kalibar and Bandar Abbas have gone on strike, and employees of the oil and gas exploitation company in Ilam have gathered in protest. Iraq has protested against the reduction of gas exports from Iran, to which the Islamic Republic claims there are technical reasons. Israel intends to supply Europe with gas via Cyprus.