CPC - Caspian Policy Center


china exploring investments in iran’s mini-lng industry

China exploring investments in Iran’s mini-LNG industry


Aug 31, 2018

Iran’s Research Institute of Petroleum Industry (RIPI), Aryana Petro Tavan (APT) Co., and China’s Fortune attended a conference on cryogenic air separation and mini-liquefied natural gas (LNG) in Iran’s capital city Tehran on August 28. China’s investments in Iran’s mini-LNG industry has been discussed before. Managing Director of National Iranian Gas Export Company (NIGEC) Alireza Kameli reported in 2016 that the country welcomed Chinese investment in mini-LNG plants construction in an effort to diversify the Iranian export market. The National Iranian Gas Company (NIGC) held international tenders for multiple small-scale LNG projects in 2017. German, Japanese, and Korean companies became involved in developing mini-LNG plants in Iran. China is now expressing interest in investing in the industry as well. Iran’s LNG exports increased this year as the protracted trade war between the United States (U.S.) and China continues. Iran saw its first major increase of LNG exports in April as the likelihood of a trade war between the U.S. and China became a reality. Iranian media reports that most of Iran’s LNG exports were to China for the month of April. China proposed a 25 percent tariff on imports of U.S. LNG in early August as retaliation against the Trump Administration’s most recent efforts to increase tariffs. This was the first time during the trade war that tariffs on fuel had been proposed. These tariffs could cause major shifts in the LNG global market if implemented, as China is the second largest importer of LNG in the world, and the U.S. is making its way to the top ranks among global LNG exporters. Demand for natural gas has significantly increased as China seeks to improve environmental conditions as part of President Xi Jinping’s "Blue Skies" effort and China’s 13th Five-Year Plan, although coal remains a primary energy source for China. The International Energy Agency’s Gas 2017 market report predicted that Chinese gas consumption is predicted to reach nearly 340 bcm by 2022, of which imports will account for 140 bcm. China will continue to diversify and secure natural gas sources as demand increases.

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