A review of the global development of the natural gas industry (LNG); Economic-security opportunities and risks for Iran

It is predicted that Liquefied natural gas (LNG) commerce will grow sevenfold the rate of expansion of the pipelines. Iran with huge expanses oil and gas will naturally be affected by developments in this sector. Using a descriptive approach, this paper first depicts the current state of the LNG industry in Iran and globally. Thereafter, by reviewing the current literature on the subject this paper proposes three distinct approaches for Iran to adopt; First, joining the current group of LNG exporting countries. Second, developing pipelines and focussing on neighbouring countries markets. Third, using the surplus production of gas for injection into oil fields for the purpose of preserving production, and completing the value chain in petrochemicals sector for export. With current sanction, the first approach considering the diversity of the market and current prices will likely encounter difficulties. Furthermore, exporting to nearby markets will not be economically justifiable. With long-term agreements, the second approach could secure longer term demands. Yet, it would not be economically justifiable for distant markets. The third aproach, would be in the long-term interest of the country since, in contrast to gas exports, petrochemicals yield higher added value and, furthermore, it would ensure the long-term increase in the production of crude. The drawback for the last approach is the dissipation of current commercial advantages. This paper proposes using a combination of all three approaches for the LNG sector.