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Iran could ship its first export-bound cargo of LNG at the end of 2018, BMI Research said, after a JV between Iran’s Kharg Gas Refining Co. and Helma Vantage began talks with Belgian ship owner Exmar to charter its floating LNG vessel Caribbean FLNG for the short term.
The JV has already sealed a deal with the National Iranian Oil Company to deploy the vessel, which has a capacity of 500,000 tons of LNG. The JV will also be in charge of storing and transferring the future LNG cargoes.
The project is worth US$600 million, and BMI Research says that its volume will not be all too significant, but it would achieve a tactical purpose, allowing Iran to deepen its relationship with its partners in Europe and Asia, building the foundation of what could become a profitable business in a future where LNG will only continue to gain prominence over oil.
“Iran offers one of the fastest options to employ and monetise the currently redundant Caribbean FLNG vessel,” BMI said. “The facility was constructed to process natural gas, which has a high methane content of 97.6%. While the gas feed from South Pars is far wetter, with greater gas liquids and condensate content, methane from flared gas at nearby offshore projects is the targeted supply.”
Iran’s ambitions in the LNG area are not new. There were plans to develop LNG production projects in place in the early 2000s. Western sanctions interrupted these plans, but now they are back on the table, unless the U.S. imposes new sanctions on the country, which is always a possibility under the current administration.
Until that happens, if it ever does, Iran has access to Western oil and gas extraction technology, and has a relationship with Total, among others. The French company signed the first new Iranian Petroleum Contract, for the development of the huge South Pars gas field. The French company has also previously expressed interest in acquiring the Iran LNG project.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.