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Iran’s Strategy for Natural GasBy: HEDAYAT OMIDVAR

Member of IGU Gas Advocacy Task Force (TF2)

Head of Communication Affairs with Science & Research Centers,

Research & Technology Dept., National Iranian Gas Company

No.29-Southern Aban St. - Karimkhan Ave.-Tehran-1598753113-IranTel:+98-21-81315646Fax:+98-21-81315682

Email: omidvar@nigc.ir

Guidelines

Using natural gas as a heating fuel is one of the varioususes of this invaluable fuel. The real and major importanceof natural gas can be realized regarding the natural gasplentiful added value and its capabilities for beingconverted into thousands of valuable economic commodities inthe oil and petrochemicals industry as the primary materialand the energy resource. The growing need for gas to provideenergy and fuel, and the foreign currency resulted fromsales and export for investment and launching primaryindustries in the country, reinforced the idea of bundlinggas industry related activities. Therefore, in line withthis, and based on the legal statute, NIGC as one of thefour major subsidiaries of Iran's Oil Ministry wasestablished. The initial capital of the company amounted to$25 million, in 1965.

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Since its establishment, NIGC has gradually achievedcapabilities and managed to have access to various sourcesand facilities such as experts and efficient human forceequipped with scientific and theoretical vision andknowledge, tools, equipment, machinery and various advancedworkshops for implementing its operations proportionate withthe economic and social development trend of the country, sothat it can independently accomplish all the related taskscomplying with the valid international acceptable standards.

Right now, The NIGC is one of the top ten gas companies inthe gas industry in the Middle East, and one of the fourmajor subsidiaries of the Oil Ministry. Having over 50yearsof experience, it is responsible for providing over 65percent of the fuel required by the country. The company, interms of providing gas, does own an important position bothinside the country and abroad and proportionate with itsneeds and expansion of its activities in the country andabroad, it has taken measures to revise its structure. Whilemaintaining and reinforcing its potential in hardware andsoftware terms, the NIGC has recruited experts and trainedstaff and updated its experienced staff knowledge.

At the present time, the number of the NIGC permanent staffis more than 18000 persons

A Glance at the NIGC Administration andOrganization Staff

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The National Iranian Gas Company is comprised of seven directoratesand one VP as follows:

1- VP of Operations2- Financial Affairs Directorate3- Planning Directorate4- Research and Technology Directorate5- Human Resource Development Directorate6- Gas Distribution Directorate7- Natural Gas Distribution Coordination and Supervision

Directorate(Dispatching)8- International Affairs Directorate

In addition to the mentioned directorates, therearethirteendepartments which directly report to the managingdirector as follows: Public Relations, Legal Affairs, Inspection andComplaint Consideration Affairs, Internal Auditing, Security,Assembly Affairs, Executive Affairs of Violation Investigation,Technical Inspection, Health, Safety and Environment (HSE),Information and Communication Technology, Commercial ExpertiseAffairs, Recruitment Affairs, and Structural EngineeringAffairs.

The Subsidiary Companies of the National Iranian Gas Company

The National Iranian Gas Company is also comprised of 54subsidiarycompanies that each of them is active in different fields of naturalgas industry with independent directorates. These companies are asfollows:

a) Provincial Gas CompaniesAt present, there are 31 provincial gas companies throughout Iranwhich are responsible for gas delivery to the cities, villages,power plants, industries and commercial centers.

b) Gas Processing Companies

Gas processing companies act under the supervision of VP ofOperations.The VPsupervises and utilizes thirteen processingplants. It is projected that through implementation of thedevelopment projects by 2025, the number of the gas processing

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companies is enhanced and based on this prediction, the total gasprocessing capacity of NIGC will add up to 1200 Million CubicMeters (MMC) per day, provided that all processing developmentprojects are realized by 2025. The gas processing companies whichwork under the supervision of this directorate are as follows:

1- Bidboland I and Masjed Soleyman Gas processing plants withthe capacity of 28.2 MMC per day

2- Bidboland II Gas processing plant with the capacity of 57MMC per day that is expected to be launched soon.

3- Shahid Hasheminezhad Gas processing plant with the capacityof 58MMC per day

4- Sarkhun and Qeshm Gas processing plant with the capacityof 17 MMC per day

5- Parsian Gas processing plant with the capacity of 84 MMCper day

6- Ilam Gas processing plant with the capacity of 6.8 MMCper day

7- Fajr Jam gas processing plant with the capacity of 125MMC per day

8- South Pars Gas Complex Company including 5 processingplants with the capacity of 210 MMC per day

Iranian Gas Engineering and DevelopmentCompanyIranian Gas Engineering and DevelopmentCompanyis one ofthe subsidiaries of the NIGC. Based on the executivesystem of oil industry projects, the company isresponsible for the implementation of National IranianGas Company master plans. In terms of the volume ofunder implementation projects, the company is thebiggest one in the NIGC and investsmost of the credits.

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The company is in charge of designing and constructionof gas transmission pipelines,gas boosting stations,development of processing plants and infrastructurefacilities.The company is based on the executive system of oilindustry projects and is authorized to deal with thefollowing tasks according to the article 5 of thecompany statute:1- Carrying out economic and feasibility studies of theprojects left to the company. 2 - Carrying out fundamental and detailed engineeringaffairs and implementing all the projects left to thecompany.3- Design, supervision and implementation of all theengineering and construction operations such asconstructionand development of oil and gas production,collection and transfer systems, wellheadfacilities,processing plants and dehydration facilities,underground gas storage, transfer pipelines, gas supplyand distribution, gas pressure boosting and reducingstations and C.N.G, telecommunication systems, pumpingstations, constructional and infrastructural activitiesand several marine structures and their relatedfacilities inside and outside the country4- Performing all the required material procurementactivities inside and outside the country5- Carrying out all the scientific, technical,commercial and service activities required for thedevelopment of the company

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IranianGas Transmission CompanyIranian Gas Transmission Company is one of the other subsidiaries ofNIGC. Since the establishment of NIGC in 1965, Gas TransmissionCompany was active under the supervision of Gas processing andTransmission Company. In 2005, the transmission directorate wasorganizationally separated from the processing sector and in 2006 theGas Transmission Company was established. The most important task ofthe company is receiving natural gas, Ethane, LPG and gas liquids fromdomestic and foreign production sources and transferring it todomestic production terminals and export terminals. The Iranian Gas Transmission Company is comprised of seven managerialdistricts and 10 operational zones. The company is responsible foroperation management of about 36000 km gas pipelines all over thecountry. It is noteworthy that the above-mentioned constructedpipelines which start from production resources to gas processingplants and continue up to the consumption points, are considered to bethe main arteries of gas transfer throughout the country. It isobvious that the complexity and sensitivity of the job cannot only besensed through referring to some figures in this regard. However, it is noteworthy that having assurance of 600 MMC of naturalgas transfer from the production regions to consumption points andexport terminals could not be materialized without the efforts of morethan4000 hardworking personnel and the management of 75high pressureboosting stations, the existence of 240 compressors andadministrationof a modern telecommunication and telemetry network.

Iranian Underground Gas Storage CompanyIranian Underground Gas Storage is one of the other major subsidiarycompanies of the NIGC established in 2008 aiming at building andmaintaining balance between the natural gas production and consumptionin specific circumstances (sudden temperature drop) and alsoorganizing, expanding, developing and speeding up underground gasstorage activities in Iran. The company is responsible for continuingthe current projects and defining new projects. It started momentumfor surveying and studying in various parts of the country to identifypotential underground structures suitable for gas storage; and studied

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217 reservoirs over a year. At present, Shoorjeh and Sarajeh gasstorage tanks with an annual capacity of 4 BCM is operational and theQaqdis, Yortsha, Nasr Abad tank and SaxtarKuh Ahmadi are underdifferent phases of study and implementation.

Iranian Gas Distribution Company

In line with the implementation of Article 44 of the Iranian Constitution and line 7 of the National IranianGas Company subsidiaries entrusting agenda, a company named Iranian Gas Distribution Company including 31 provincial gas companies was founded responsible for the following activities.

1)Reception, distribution, transaction and commissionof natural gas regarding the related rules

2)Maintenance and administration of the operations related to the secondary lines, gas feeding and distribution networks, pressure-reducing stations, measurement stations, cathodic protection and otherinstallations and building related to the company activities

3)Offering services to the natural gas applicants andsubscribers, gas sale according to the contract and

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endeavor to promote the quality of before and aftersale services to the customers

4)Devoting effort to establish the research system and strengthen the relationship with the scientificand research centers in order to reach the scientific and technological innovations and their implementation to answer the company needs

5)Transportation, warehouse keeping, marketing, distribution and selling of the products and services of other investment-receiving companies and individuals and legal persons who are active inthe production and commerce fields

6)Offering technical, managerial, executive and financial services to the other investment-receiving companies

Iranian Gas Commerce CompanyIranian Gas Commerce Company as one of the other NIGCsubsidiary companieswas established in 2008 in linewith the macro objectives and policies to fulfillthefollowing detailed tasks:

Commerce activities including marketing, purchase,sales, import, export, goods and equipmentcommissioning and some hydrocarbon derivativesincluding natural gas, Liquid Petroleum Gas (LPG),Liquefied Natural Gas (LNG), gas liquids, gascondensates, sulfur and other processing plantsproducts

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Carrying out goods-related tasks includingwarehouse keeping, customs formalities, and otherrelevant activities

Rendering technical and expertise services, goodstechnical inspection, updating and classifyinggoods, developing vendor lists and some otherrelevant activities

An Acquaintance with the Iranian Gas IndustryIran Gas IndustryHaving a glance at the writings of the ancient historians, one can realizethat Iranians were the pioneers of using gas and oil derivatives. Forexample, the existence of the ruins of fireplaces and temples like theimmortal fire near Kirkuk, Known as Bokht-Ul-Nasr torch was located near anatural gas reservoir. Zoroastrians' temple near Masjid Soleyman andhistorical narrations regarding Azargoshasb fireplace, all together is prooffor this very claim. Ancient Iranians, based on the norms of their ownreligion, esteemed fire, and tried to keep it alive. In central and southernplateaus of Iran and the regions where dense woods existed, Iranians usedsome other things apart from wood taken from jungle to keep the holy firealive and the nature of these regions with theabundant underground reservesmade this effort easy.

Natural Gas Industry Birth The basis of gas industry emerged in the USA and Europe was not natural gas,but it was the gas resulted from heating coal. The gas resulted from heatingcoal, which was used for lighting transformed the lifestyle of the people inthe early 18th century. Working hours of factories increased and people coulduse lighting without having to buy and use expensive and hazardous candles;in this way, people could read newspapers and books. Finally a Scottish inventor called William Mordak was the first person whofound out that using gas as a source of energy was easier than using coal,because it could be transferred by ship and was easy to control, as well. In1792, William Mordak managed to use gas in order to provide his own houselighting. Later on, in 1799 someone called Philip Lyon accomplished a test onthe gas resulted from heating sawdust and coal. He registered the gas

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distillation methodresulted from wood.Nevertheless, the French government refused to accept Philip Lyon's theoryand viewpoint for expanding gas lighting system not until 1807 when for thefirst time Winsor used gas for lighting of London streets. At first, woodenpipes were used for transferring gas; however gradually some pipes such ascannon pipes related to the British Navy substituted for them. In 1819, there was a pipeline of about 482 km, which supplied the requiredgas for about 50 thousand gas consumers. During those years, variousactivities commenced for utilizing gas in industry. Although, Iranians were the pioneers of using gas and other oil derivatives,the first historical documents related to planned using of gas in Iran goesback to the era of Qajar and the kingdom of Naser-Al-Din Shah. In 1873, whenking Naser-Al-Din Shah had a visit from London, he was surprised when he sawlights in the streets of London. Returning home, he ordered to construct anduse gaslight factory. In 1908, the first oil well drilled in Masjid Soleyman reached oil; and ahuge amount of associated gas was flared due to the long distance betweenproduction sources and consumption origins on one hand and high cost ofinvestment and low consumption rate in the south of Iran, on the other. Butgradually oil reservoirs came into stream one by one and Iran thought ofusing natural gas for supplying the required uses of home sector, especiallythe houses of the National Iranian Oil Company (NIOC) staff in oil-bearingregions such as Masjid Soleyman, Aghajari, Haftgel and Abadan. Even thoughthe major activities of oil industry in those days included crude oilproduction, transmission and processing in southern Iran, agent companiescarried out some limited activities for production and process of naturalgas.In Iran at first, just the oil was extracted while a plentiful amount ofassociate gas was also produced. From 1910 to 1960s, the associated gaseswere mainly flared. In early 1960s based on a contract signed with Russia,associated gases were gathered and transferred to Russia in lieu ofconstructing a steel mill in Iran. In fact, for 50 years the associated gaseswere flared without any use, but after gas export to Russia, the associatedgases were supplied in Shiraz for the first time. In fact, Shiraz cementfactory was the first factory which becamegas-fuelled and later on the gasnetwork was expanded to some other cities in Iran. In this way, the gas whichwas uselessly flared for 50 years entered the gas distribution network andwas used at home sector. Until no independent gas fields were discovered inIran, it was natural to process and use associated gas in this way.Nevertheless, after discovery of some independent gas fields such as Kanganand South Pars, it was necessary to divide responsibilities regarding gasextraction between the NIOC and the NIGC. In other words, crude oilproduction, extraction, sales and export was left to the NIOC; and naturalgas processing, transmission and distribution to the NIGC. Around 50 years ago, the policies adopted by the NIOC paved the grounds forthe NIOC to have access to technical and economic requirements to handle and

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restrain associated gases and consequently gather, process, transfer and sellthem. Due to raising the issue of exporting gas to the foreign countries,comprehensive studies were completed and the project for the trans-Iraniangas pipeline known as IGAT I was implemented and came into stream. Due to theessentiality of leaving all the gas affairs to a single organizationresponsible for the determined responsibilities and objectives in future, andbecause of the general agreements between Iran and Former Soviet Union toexpand economic cooperation in 1965 which led to inking a protocol inJanuary, the same year, the issue of gas export was raised and the NIGC wasestablished in March 1966 and started its activities. At present, the NIGC isone of the four major subsidiary companies of the Oil Ministry. The chairmanof its general assembly is the esteemed president and the chairman of itsBoard of Directors is the Oil Minister.

The NIGC Strategic ObjectivesThe NIGC major objectives can be surveyed in twodifferent sections: national and international. In both sectors, the main principle is customersatisfaction and maximum productivity achievement. In line with this and based on the outlook document(2025 horizon), the NIGC aims at ranking the thirdamong natural gas producers in the world to achieve 8to 10 percent of the global gas trade share. The secondobjective of the NIGC is ranking the first in theregion in terms of gas technology. Plans and policies of the NIGC in international leveland ranking the third in the world and achieving ashare of10 percent of natural gas trade in the worldare as follows:1- Processing about 1200MCM per day of natural gas 2- Enhancing natural gas share in the energy basket of

the country by 70 percent, through substitutingliquid oil products for natural gas

3-Increasing natural gas export to regional andinternational markets through pipelines and othermethods

4-Attracting foreign investment through capital markets

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and/or joint projects 5- Economic firms running vision and improvingstructure to maximize profitability and competition ininternational markets6- Maximization of the added value through using gas inenergy consuming industries and/or establishment ofindustries like GTL 7-Reinforcing private sector in downstream and gasdistribution industries 8- Cooperation with the countries in the region inproduction and transmission affairs 9- Impressing gas management status in the region 10- Benefiting from natural gas adjusted pricing system

Top Five Gas Reserve Holder countries in the World by the End of2013Unit: Trillion Cubic Meters

Iran 33.8Russia 31.3Qatar 24.7

Turkmenistan 17.5USA 9.3

Iran’s Ranking in the World’sGas Reserves Economy prosperity in the world requires rich sources of energy.Various survey indicate that by 2050 hydrocarbon resources will bestill the most major sources of supplying energy. Examining the trendof these resources and their geographical distribution indicates thatonly the five countries in the Persian Gulf region -the IslamicRepublic of Iran, Saudi Arabia, Kuwait, Iraq and United Arab Emirates-will be the major oil producing countries. In addition, Iran, Russia,

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Qatar, Saudi Arabia and United Arab Emirates will be the major gasproducing countries by 2025. Gas reserves, like oil reserves, are categorized in three groups:proven reserves, probable reserves and possible reserves. The volumeof the proven natural gas reserves has tripled over the last threedecades. That is to say, the proven gas reserves from about 72TrillionCubic Meters (TCM) in 1970 has reached over 186 TCM at the end of 2013and Iran with about 34 TCM and 18 percent share of the world gasreserves ranks the first among the reservoir holders.Among the operated gas reservoirs in Iran, two reservoirs namelyMaroun Khami located in Southeast of Ahwaz and South Pars are ofextreme importance. Especially, South Pars as the second and mostimportant gas reservoir of Iran owns 50 percent of the country’s wholegas reserves and more than 8 percent of the world’s.

Top Ten Gas Reserve Holder Countries in the World in 2013

Item Country Name Proved Reservesby the End of2013 (TrillionCubic Meters)

Partial Share(Percent)

1 Iran 33.8 18.22 Russia 31.3 16.83 Qatar 24.7 13.34 Turkmenistan 17.5 9.45 United States of

America9.3 5

6 Saudi Arabia 8.2 4.47 United Arab

Emirates6.1 3.3

8 Venezuela 5.6 39 Nigeria 5.1 2.710 Algeria 4.5 2.4

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Iran's Position in the World Production Basket and GasConsumptionAccording to the International Energy Agency (IEA) reports, by 2030 inthe 30 countries which will form the great Europe, natural gas demandamong other initial energies will grow significantly and from 450million tons of oil equivalent in 2003 will reach 760 million tons ofoil equivalent in 2030. It is noteworthy that demand for natural gasin the great Europe was just 110 million tons of oil equivalents in1970. Studying the status of natural gas production and distributionindicates that when demand for natural gas in the earlier-mentioned 30countries in Europe increases gradually, the dependence on theimported gas resources will dramatically rise. In line with this andbased on the results of the studies conducted by lEA, while Europe wasnot in need of importing gas by 1973, in the year 2000 a highpercentage of the 520 BCM gas supplied to Europe (30 members) wasprovided through importing gas from non-European countries. In 2030,the Europe will depend on importing natural gas more than ever. In2030, natural gas production in great Europe is estimated to be lessthan 300 BCM. Whereas, around 600 BCM of natural gas is imported toEurope from outside the European Union. In this way, European Union's share for importing natural gas whichwas almost zero in 1970, reached around 36% in 2005 and is forecastedto add up to 70% by 2030.

Iran’s position among the world’s top ten natural gas consumingcountries in the world in 2013

Item Country Name Consumption (BillionCubic meters)

Partial Percent

1 United States ofAmerica

732.2 22.2

2 Russia 413.5 12.33 Iran 122.2 4.8

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4 China 161.6 4.85 Japan 116.9 3.56 Canada 103.5 3.17 Saudi Arabia 103 3.18 Germany 83.6 2.59 Mexico 82.7 2.510 England 73.1 2.2

Iran’s position among the world’s top ten natural gas producingcountries in the world in 2013

Item Country Name Production (BillionCubic meters)

Partial Percent

1 United States ofAmerica

687.6 20.6

2 Russia 604.8 17.93 Iran 166.6 4.94 Qatar 158.5 4.75 Canada 154.8 4.66 China 117.1 3.57 Saudi Arabia 103 38 Algeria 57.6 2.39 Indonesia 70.4 2.110 Netherlands 68.7 2

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Iranian Gas Market privileges and advantages1- The shortest route to global markets 2- Having the huge infrastructures for transferring gas abroad 3- The minimum required investment4- Possibility of transit to Turkey, Europe and Persian Gulf

region countries 5- Possibility of gas swap to the adjacent countries 6- Existence of potential major consumers 7- Owning 34 TCM proven gas reserves and ranking the second

among gas owning countries with the current trend by thenext hundred years

8- Ranking the third among producers that will rank the secondin fifteenyears

9- Having necessary infrastructures for gas export and swap andtransit to Europe, East Asia and Persian Gulf regioncountries

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Enhancement of Iran's 8 to 10 Percent Share inthe Global Gas TradeIt is the policy of the NIGC to enhance Iran's currentshare in the total global gas trade to reach 8 percent.At present, processing and dehydration capacity of theIran's gas processing plants is about 600 MCM per day;however, based on the Fifth Development Plan it is toreach 1200 MCM per day. At present, Iran's share in gastrade including export, import, swap,transit, andbartering gas for electricity is around 2 percent.However, Iran's share in natural gas global trade is toreach 10% by 2025. Currently, the NIGC meets more than65 percent of the country’s energy needs through itsoil and gas product basket.The objective is havingaccess to 1200 MCM per day of gas production, 70thousand km of high pressure pipelines and achieving 8to 10 percent of gas global trade in the next 15 years.In line with the implementation of Article 44 of theIranian Constitution, one of the priorities of the NIGCis privatization of the company. On this basis, all thelogistics, technical, maintenance andprocurementservices, power generators, pipelines andaccess roads to them are supposed to be left to theprivate sector. With respect to the fact that Iraniancompanies can meet almost all the needs of the

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industry, they are to construct high-pressure stations,observing the world's latest standards such API.Therefore, in order to access gas production of 1200MCM per day of gas, in addition to new financialsources, promotion of the domestic private sectorcapabilities is needed.

A Glance at the NIGC Production and ProcessingFacilities in Line with Achieving a Premium Rankin the Global Trade Balance

Natural Gas ProcessingWith respect to the natural gas share in the fossil energycarrier basket and the 47 year valuable experiences in the gasindustry activities in terms of hardware and software, the NIGChas a high potential and is considered to be among the major gascompanies in Iran and the Middle East. As much as consumptionrate has gone up, and based on the horizons developed in thedevelopment outlook document, natural gas production, processingand dehydration capacity has had a growing trend to meet the newrequirements. Without operating its development projects, theNIGC is capable of processing 600MCM per day of gas. As mentioned

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earlier, at present, the NIGC is responsible for the managementand operation of seven independent and private processingcompanies. According to the estimations, by 2025, the number ofgas processing companies is supposed to increase throughcarrying out development projects. Predictions indicate that incase all the gas processing development projects arematerialized, by the end of 2025, the total processing capacityof the NIGC will amount to over 1200 MCM per day. Natural Gas TransferNatural gas transfer from production origins and processingplants to various consumption points in various sectors of gasindustry is of high sensitivity and importance. The total lengthof high-pressure gas transfer pipelines in Iran is around 36thousand km. The pipeline's transfer capacity is estimated to be600MCM per day based on the decisions adopted in the framework ofthe twenty-year outlook document, the length of pipeline from 36thousand km should reach 70 thousand km. Hence, the Iranian GasTransmission Company as one of the subsidiaries of the NIGCbenefits from all vast executive- logistic facilities and variousmachinery to implement general projects in the realm ofengineering, fundamental and detailed designing gas especially inrelation with designing gas transfer pipelines, supply anddistribution networks, pressure reduction stations allover thecountry while observing international standards. Iranian Gas Transmission Company, which enjoys 75 active gaspressure-boosting stations, has taken measures to boost gastransmission capacity to meet the requirements of both domesticand export sectors through planning for construction of newstations. In case the above- mentioned projects 35,200 km ofpipeline by 2025 are materialized, our pipelines will benefitfrom 140 active stations. The status of Iran's strategic gasreserves in south coast of Iran and the existence of commongigantic South Pars gas field shared with Qatar has made the ParsSpecial Energy Zone so important. Iran's share from gas reserves in South Pars is estimated tostand at around 14.2 TCM (around 8 percent of the world's total

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gas reserves and 50 percent of Iran's gas reserves). Taking intoconsideration all the above - mentioned points, the Pars SpecialEnergy Zone's position and role in development of the economy ofthe country is undeniable.

The most important investment opportunities in the NIGCplans

Item ProjectTitle Explanation

Building

Duration

Estimated

Investment

Credit(MillionDollars)

1

The 9th

trans-IranianPipeline

Construction of a 1800-km, 56-inchpipelinealong Assaluyeh-Bazargan border , 16 gas pressure booster stations with a total 1725 Mega Watt power

2 5137

2

gas pressurebooster

stations ofthe 7th

trans-Iranian GasPipeline

Construction of 13 gas pressure booster stations with a total 100 Mega Watt power

2322

3

SangBastgas pressure

boosterstations

The power of the station is 50 Mega Watts with a (1+1) unit arrangement 2 73

4 2nd Phase ofthe Ilam Gasprocessing

Processing 3.4 mcm of gas and production of 66 thousand tons of Ethane, 111 thousand tons of C+

3, 126 thousand tons of

2147

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plant C+5 and 51 thousand tons of sulfur

5

Gevarzin-BandarAbbassPipeline

70 kilometers and 20inches

2 18

6

Gasdistributionto Sistan-BaluchestanProvince

Construction of a 260-km, 36-inch pipeline along Iranshahr- Zahedan, the Khash 85 km, 16-inch pipeline, the Iranshahr-Delgan junction 281 km, 56-inch pipeline, the Chahbahar 60 km, 42-inch pipeline, Zahedan-Zabol junction 80 km, 36-inch pipeline, the Zabol 120 km, 20-inch pipeline, networking for 202 thousand urban, and 82 thousand rural households of the Zahedan, Khash, Chabaharand Zabol cities and the conversion of theIranshahr steam power plant

4

1600

7

Gasdistributionto the rest

of thecities andvillages

Gas distribution to 2363 thousand households using pipelines and other methods 3

4738

Natural Gas Distribution and ConsumptionBesides Iran's integrated and vast gas distribution network inhome and business sector which consumes the lion’s share of theproduced and processed natural gas, there are some other sectorsincluding power plants, major industries and petrochemicals thatconsume a significant amount of the processed gas. The share ofgas in the country’s oil and gas product basket has reached 65

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percent so far and is expected to continue to grow in the nearfuture. Until the present time, the total length of over 263 thousand kmurban gas distribution network has been constructed which isresponsible for providing gas to 1026 cities and17330 villages.At present, around 22.3 millionhouseholds enjoy natural gas.