Iran scraps second LNG project

Iran_LNG

Iran has ditched a second Liquified Natural Gas (LNG) project which was to be carried out by French energy giant Total, after a similar project with the Anglo-Dutch Shell was recently scrapped, reports Agence France Presse.

The revised plan is to "inject the gas from South Pars blocks 11, 13 and 14 into oil fields and in the national gas network," said Mohsen Khojastemehr, Iran's Deputy Oil Minister. That has been seen as an indication that the LNG project which was to be constructed by Total in phase 11 has been dropped.

Shell was planning to build another LNG facility at phases 13 and 14, but that project was also scrapped. The latest announcement came as several top global energy majors either quit or were considering pulling out from Iran, which is home to the world's second-largest natural gas reserves. Total had been awarded the gas block but has withdrawn from Iran following the fourth round of UN sanctions.

Shell pulled out ahead of the sanctions. Iran's oil officials have said they are reviewing the country's energy policy to shift focus from production of LNG to producing pipeline gas for exports.

Ahmad Ghalebani, managing director of state-run National Iranian Oil Company, has said that piped gas exports are cheaper and can be done faster, while exports of LNG require significant investment, complicated technology and are time consuming.

A third LNG project, Iran LNG, headed by the National Gas Company of Iran using German technology is continuing, with Tehran having already invested over one billion dollars.

As well as the UN sanctions, Tehran has been hit with unilateral sanctions by the United States and European Union for its nuclear programme. The measures target Iran's banking, financial and vital energy sectors in a bid to force the country into abandoning the uranium enrichment programme, which Western countries fear masks a weapons programme. Iran has consistently denied the charges.

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