Warnings Continue Over Increasing Imbalance in Natural Gas Production and Consumption in Iran

A member of the Energy Commission of the Islamic Consultative Assembly warned that the imbalance between natural gas production and consumption in Iran is "constantly increasing" due to various issues stemming from mismanagement. Reza Sepahvand, a member of the Energy Commission, stated in an interview with ILNA news agency on Thursday, November 25, that "the pressure in the South Pars reservoirs has decreased, making gas extraction more difficult, and some resources have encountered problems." This comes despite experts warning about this issue and the need for pressure enhancement in the wells of this field for over a decade. The parliament member further noted that gas wastage and leakage in the country's gas network is "very high," and "on the other hand, excessive consumption has increased, leading to a constant rise in imbalance." Recently, IRNA news agency also reported that a National Development Fund report reflected a rapid trend of gas imbalance due to decreased production. The report indicates that if the current trends in production and consumption continue, gas supply will decline starting next year. Reports suggest that today, 75% of the gas for residential and commercial-industrial sectors in the country is supplied from the South Pars gas field, whose equipment modernization and upgrades have long been overdue, resulting in pressure drops. IRNA cites government reports stating that "alarming predictions indicate that if the current demand and production trends continue, by the year 1420, with pressure drops in the South Pars reservoirs and increased consumption, an imbalance of approximately 1,000 million cubic meters per day will occur." The increase in natural gas consumption in Iran occurs alongside a halt in production growth under President Raisi's administration. The recent warnings from the Energy Commission member regarding the consequences of pressure drops in South Pars resources come at a time when, earlier in the last days of the year 1402, the Ministry of Oil under Ibrahim Raisi signed a $20 billion contract with domestic companies to construct pressure enhancement platforms in this field. The signing of this contract for the construction, installation, and commissioning of 14 pressure enhancement platforms occurred despite the need for such platforms being raised over a decade ago, with negotiations by the Ministry of Oil with various companies taking at least eight years. Concurrently with the signing of the $20 billion contract, Masoud Oji, the then Minister of Oil of Iran, mentioned the need for at least $80 billion in investment to increase production by 50%. The Research Center of the Parliament previously published a report estimating Iran's total natural gas supply in the year 1420 to be less than 898 million cubic meters per day. In the same report, daily consumption in 1420 was estimated to be close to 1,411 million cubic meters. Based on this, the country will face a daily shortfall of 512 million cubic meters of natural gas. Reza Sepahvand also warned on Thursday about the "excessive" consumption of gasoline and the country's compulsion to import this product from abroad, calling for management and optimization of gasoline consumption. This parliament member considered measures such as combating fuel smuggling, compelling automakers to produce fuel-efficient vehicles, and making the car market competitive through licensing for the private sector as necessary steps before any increase in gasoline prices. This issue effectively points to widespread mismanagement in various sectors of energy production, distribution, and consumption in Iran.