TEHRAN (FNA)- Iran Liquefied Natural Gas Company, in which state-owned National Iranian Oil Company has a 49 percent stake, will produce the country’s first LNG in December 2010, Managing Director Ali Kheirandish said.
“We will produce 10.8 million tons a year of LNG in the first phase, of which 70 percent will be exported to Europe and Asia,” Kheirandish said today at a conference in Abu Dhabi.
He also added that “we hope to produce 21.6 million tons a year after the second phase,” which is expected to start by 2013.
The company’s 3 billion-euro ($4.7 billion) LNG plant, located 60 kilometers (37 miles) from the coastal town of Assaluyeh, will be Iran’s first. Other LNG projects have been hampered by delays as oil companies such as Royal Dutch Shell Plc and Total SA refuse to commit to building plants, citing rising costs and the United States’ heavy pressures over Iran, which holds the world’s second-largest gas reserves.
LNG is natural gas that’s chilled to a liquid to aid transportation and storage.
The project, which is 8 percent to 9 percent complete, “may see costs rise by 10 to 15 percent,” Kheirandish told reporters. The first phase has received 910 million Euros in funding from a western European bank and about 1.1 billion Euros from a Chinese bank, he said. The remaining 1 billion Euros will come from the plant’s stakeholders, he said.
Iran Liquefied Natural Gas, in which National Iranian Oil’s Staff Pension Fund holds the majority 51 percent stake, is seeking $5 billion of funding for the second phase, which will double the plant’s capacity.
The facility will receive the 3 billion cubic feet of gas produced every day at Area 12 of Iran’s South Pars field. Kheirandish didn’t say how much gas production from the field would cost.
Iran plans to produce 80 million tons of LNG a year by 2020, he said. That would surpass the output of the world’s biggest LNG exporter, Qatar, which will reach 77 million tons a year by the end of this decade.