Gas Imbalance: A Structural Challenge for Iran’s Energy Industry Until 2015

According to Energy Press, Iran’s gas industry is currently at a point where it could either be a driving force for the country’s economic development or a source of structural difficulties in the future. The recent remarks by Saeed Tavakoli, CEO of the National Iranian Gas Company, about the gas imbalance are a wake-up call that should be taken seriously. He emphasizes: Resolving the imbalance is only possible with serious reforms in the consumption pattern and development of the gas industry, not just by relying on underground resources.
From historical achievements to the coming crisis
The history of Iran’s gas industry shows that the country has been able to reach 95% of domestic and industrial gas supply in half a century, from 2% of the population coverage. This success is the result of extensive investments, the development of gas fields, and the creation of transmission and distribution networks throughout the country. Despite these achievements, Iran’s gas industry today faces serious challenges:
Household consumption is more than four times the global average, and unsustainable consumption patterns are putting a lot of pressure on the supply chain, while the decline in production in South Pars will exacerbate future supply cuts.
Estimates show that the gas imbalance will reach 619 million cubic meters per day by 2025, equivalent to the entire current production of Assaluyeh, which is a sign of a severe imbalance between supply and demand.
These data show that Iran’s main problem is not a lack of resources, but an imbalance in policies, institutional structure, and consumer behavior. In other words, although gas reserves are huge, inadequate management and unrealistic policymaking can threaten historical achievements and expose the country to an energy crisis.
Imbalance; a policymaking challenge that requires institutional reform
The CEO of the National Iranian Gas Company warns that the cause of gas imbalance is not a lack of resources, but rather weak policymaking and inadequate upstream documents; A problem that, without structural reform, even the country’s huge reserves cannot solve the crisis.
This point clarifies an important fact: Iran has the second largest proven gas reserves in the world, and relying solely on underground resources cannot solve the imbalance problem. In fact, 70 percent of these reserves are located in the offshore and South Pars regions, and their extraction, transportation, and processing require large investments, advanced technology, and a long time.
In addition to technical limitations, pricing and subsidy policies also need to be reviewed. The cost of producing and transporting each cubic meter of gas in Iran is estimated at about 5 cents, while the price offered to consumers is only 0.22 cents. This significant gap has several consequences:
1. Reduced investment incentives: The private sector and domestic and foreign investors, given the low returns and high risks, are reluctant to participate in the development of gas fields and transmission lines.