he Iranian Commercial Gas Company (ICGC), a subsidiary of state-owned National Iranian Gas Company, has secured a deal to export liquefied petroleum gas to India.
Mohammad Ali Barati, the head of ICGC, made the statement on the sidelines of "the 2nd Argus Iran LPG and Petrochemical Conference" in Tehran this week, the National Iranian Oil Company's news portal reported on Friday.
Iran exports LPG to customers in Asia, including China, Pakistan, Iraq, Turkey and India. After the lifting of international economic sanctions against Iran, the two sides engaged in talks over a long-term LPG supply deal to the South Asian country.
According to India's Petroleum Minister Dharmendra Pradhan, importing LPG from Iran is much cheaper for India than producing it at home.
Currently, India has a consumption capacity of 21 million metric tons of LPG, but experts say LPG demand in the fast-growing economy could rise to 30 million tons annually in the next few years.
"Iran is ready to export a wide range of oil, gas and petrochemical byproducts to global markets," Barati noted, adding that holding such meetings, attended by LPG analysts, refiners, shipping companies and technology solution providers, will help the country expand its role in the global LPG and petrochemical markets and establish new relations to navigate the evolving landscape.
Hosted under NIOC auspices, the conference brought together global and regional experts to discuss the factors driving growth in the LPG market and identify supply and demand trends.
"Despite competitive market conditions, Iran can emerge as a significant player in the LPG sector by expanding production and trade," he said without elaborating on the details of the deal with India.
"We will not focus solely on the Indian market and intend to diversify our export base."
According to the official, ICGC is in charge of marketing sulfur and LPG from South Pars Gas Field in the Persian Gulf. The company also handles the sale of LPG from the Sarkhoun, Qeshm and Fajr-e-Jam refineries.
Headquartered in London, Argus is a leading provider of data on prices and fundamentals, news, analysis, consultancy services and conferences for the global crude, oil products, LPG, natural gas, electricity, coal, bio-energy and petrochemical industries.
Iran LPG Production
Data provided by Argus show that Iran raised LPG exports to over 5.2 million tons in 2016, from 4.6 million tons in 2015 and made strides into East Asian markets with delivery of its first cargo to Indonesia in October. Iran currently accounts for 17% of LPG trade in the Middle East, and this is expected to grow to 40% by 2020.
"Expanding the national gas network and replacing oil byproducts as feedstock with natural gas in refineries and power stations have led to an increase in shipping oil derivatives, namely naphtha, diesel, bitumen, sulfur, LPG and jet fuel," Alireza Rajabpour, the head of export and import department at the National Iranian Oil Products Distribution Company said.
The company sold 220,000 barrels per day of petroleum products in the previous fiscal that ended in March, data showed.
Gas extraction from the giant South Pars field in the Persian Gulf has exceeded 550 million cubic meters per day, which is why around 90% of Iranian power plants now burn gas instead of other fuels for power generation.
Referring to China and India as the biggest customers of Iranian petroleum products, Rajabpour said that due to low demand in Europe, the company is now concentrating on boosting exports to the Nakhchivan Autonomous Republic, Armenia, Pakistan, Afghanistan, Iraqi Kurdistan and Sri Lanka.