Iran Discovers Huge 7.5 Trillion Cubic Feet Gas Reserve In Fars Province Amid US Sanctions Pressure

(MENAFN- Live Mint) Iran has discovered more than 7.5 trillion cubic feet (212.4 billion cubic metres) of natural gas in a field in the southern Fars province, Oil Minister Mohsen Paknejad said on Sunday (August 23), according to state media.

The discovery comes as Iran works to repair energy infrastructure damaged during its war with Israel and the United States and faces the prospect of new US sanctions that could put additional pressure on its economy.

5,700 billion cubic feet recoverable

Paknejad said the newly discovered field contains more than 7.5 trillion cubic feet of gas. Based on the estimated recovery ratio, Iran could ultimately extract around 5,700 billion cubic feet from the field.

The minister described the gas as“sweet”, meaning it contains relatively low levels of hydrogen sulphide and other impurities. This could help reduce development and operating costs, according to Paknejad.

Boost for Iran's gas reserves

The discovery could provide a significant addition to Iran's natural gas resources as Tehran seeks to maintain production amid damage to its energy infrastructure.

Iran's pre-war natural gas production was estimated at around 650 million cubic metres per day, equivalent to approximately 8.4 trillion cubic feet annually.

The recoverable gas from the newly discovered field therefore represents a substantial volume compared with Iran's annual production.

War damages Iran's energy infrastructure

Iran's energy sector has suffered damage during the conflict with Israel and the United States.

Strikes since the war began in late February reduced Iran's natural gas production capacity by about 230 million cubic metres per day, according to a senior Iranian government official quoted in July.

The government had said it expected to restore around 100 million cubic metres per day of lost production capacity“within the coming months”.

Tehran has since been working to repair damaged energy infrastructure and restore production.

US sanctions add pressure

The gas discovery comes as Iran faces the prospect of new US sanctions, which could further restrict its economy and complicate efforts to rebuild its energy sector.

Despite the pressure, the new discovery could strengthen Iran's long-term gas supply outlook and provide additional resources for domestic consumption or potential exports if the necessary infrastructure and investment become available.

Sweet Gas could lower development costs

The quality of the newly discovered gas could also make the field more attractive for development.

Paknejad's description of the gas as“sweet” suggests that it would require less processing to remove impurities, potentially lowering both development and operating costs.

However, the scale and timing of any future production will depend on field development, infrastructure, investment and the broader economic impact of sanctions.

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