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How Iran’s Abandoned Storage Projects Escalate Gas Deficit Crisis?

Dalga Khatinoglu
Dalga Khatinoglu

Oil, gas and Iran economic analyst

May 10, 2024, 16:29 GMT+1Updated: 16:57 GMT+0
A view of Shourijeh and Serajeh UGS projects in central Iran
A view of Shourijeh and Serajeh UGS projects in central Iran

Iran's two-decade delay in developing its underground gas storage (UGS) facilities, has exacerbated winter gas shortages and export disruptions, despite having the world’s second largest reserves.

Underground Gas Storage facilities (UGS) are not man-made facilities, but are depleted oil or natural gas fields, aquifers, mines, and salt caverns that have the geological properties to store natural gas over long periods.

Despite initiatives under President Ebrahim Raisi's administration, progress on several UGS projects remains limited as of the end of 2023, according to a report from the National Iranian Gas Company (NIGC) obtained by Iran International.

Initially, Iran launched two UGS projects, Shourijeh and Serajeh, around twenty years ago, with a combined capacity of less than 3.5 billion cubic meters (bcm). However, as of summer 2023, only 3.1 bcm of gas had been injected into these facilities for consumption during the winter season. Their gas re-extraction capacity, totaling 30 million cubic meters per day (mcm), represents less than 4% of the winter peak consumption level, surpassing 850 mcm/d.

Iran has 250-300 mcm/d of gas deficit in winter and UGSs compensate only 10% of that. The NIGC’s report says the expansion of Serajeh phase 2 has developed by only 3% and Shourijeh phase 2 progressed only 17% as of end-2023, far behind the plan.

Additionally, the National Iranian Oil Company's exploration of three new UGSs has faced delays, with only modest progress made on two projects, raising uncertainty about their feasibility as gas storage facilities. These sites are situated in close proximity to major industrial cities such as Tehran, Isfahan, and Tabriz, where gas demand is high.

All of the exploration area for new UGSs are located very close to Iran’s industrial cities of Tehran, Isfahan and Tabriz.

Iran’s large industries need about 145 mcm/d of gas, but only 110 mcm/d was supplied during last winter due to severe gas shortage.

Although Iran holds the second largest reserves in the world, lack of investment in developing new fields and rehabilitating older ones has lagged behind in the past two decades due to lack of investments and technology. International and US sanctions, as well as financial mismanagement by the government have prevented Iran from fully exploiting its vast natural reserves.

In a related context, Mehdi Mahdavi Abhari, the Secretary-General of the Petrochemical Employers Association, announced last week that Iran lost $800 million in petrochemical exports due to gas shortages last year.

The document from the National Gas Company reveals that during the summer, nearly 70 million cubic meters of gas were supplied daily to petrochemical plants, 20 million cubic meters to cement factories, 36.5 million cubic meters to steel mills, and 17.7 million cubic meters to refineries. In total, during the summer, 145.5 mcm/d of gas were delivered to the country's major industries. However, on January 12 this year, this figure decreased to 110 mcm/d.

Global UGS industry

Iran’s neighbors Azerbaijan and Turkey have expanded their UGSs capacity to 3.5 bcm and 5 bcm respectively during past two years to enhance their export and transit abilities. Meanwhile, UAE and Saudi Arabia are also building their first UGS facilities.

Although there is no updated global UGS market report for 2023, 2022 witnessed a notable increase in capacity, driven by the global gas crisis. This underscores the importance of storage for supply security, with China and the Middle East emerging as key growth markets for UGS activities.

According to Cedigaz, the International Association offor Natural and renewable Gases, by the end of 2022, the world’s working gas capacity reached 429 bcm, a 1.3% rise from the previous year, with significant contributions from China and Europe. The peak withdrawal rate also rose by 1.7% to 7.3 bcm/d.

While the UGS market remains highly concentrated, with 5 countries (United States, Russia, Ukraine, Canada and Germany) accounting for almost 70% of global storage capacities, there is a clear shift of storage activity towards new, fast growing gas markets, China and the Middle East notably.

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Canada's Spy Agency Warns of Escalating Iranian Aggression in West

May 10, 2024, 16:26 GMT+1
•
Iran International Newsroom

Canada’s intelligence agency is pointing to escalating aggression by Iran in Western countries, ranking the country among the foremost perpetrators of foreign interference and espionage.

In its annual report released this week, the Canadian Security Intelligence Service (CSIS), says Iran has continued to conduct hostile activities in Canada and will “continue to target its perceived enemies even when living in foreign countries in support of its ultimate goal of regime preservation.”

CSIS called Iran’s external operations in Western countries “aggressive and expansive,” including lethal plots in the US, the UK, and several European countries.

Those activities included elicitation, cultivation, coercion, illicit financing, malicious cyber activities, and information manipulation.

“Iran and its intelligence services are interested in influencing and clandestinely collecting information on the Iranian community, including anti-regime activists and political dissidents; human, women’s and minority rights activists; and fugitives wanted by the regime,” the report read.

Earlier this week, Canadian parliamentarians unanimously voted on a non-binding motion calling for the Iranian regime’s paramilitary force, the Islamic Revolutionary Guards (IRGC), as a terrorist entity and expelling approximately 700 Iranian agents from Canada.

While the Liberal party, including Prime Minister Justin Trudeau, supported a similar motion in 2018, the IRGC has not been listed as a terrorist organization. The government and experts often mention that some Iranians are obligated to join it during their mandatory military service.

In November 2022, CSIS first acknowledged that it was actively investigating what it called multiple "credible" death threats from Iran aimed at individuals in Canada, as reported by CBC News.

Subsequent reports by CBC News that year highlighted how Iranian dissidents in Canada said they were being watched and are under threat from the regime in Iran. Global News similarly reported in 2023 that Iranian dissidents live in fear of imminent harm from the Islamic Republic's agents.

Adding to those fears, the Iranian-Canadian diaspora has long warned the government that Canada harbors regime-affiliated officials on its soil.

Over a year following the Woman, Life, Freedom movement in Iran in 2022 – and the diaspora’s continued calls not to allow regime-affiliated officials into the country – the government began taking some action to bar individuals from entering and began proceedings for deportations.

The diaspora has maintained that the current measures do not suffice and that if the IRGC were on the terrorist list, members who have gained Canadian citizenship would be responsible for crimes committed abroad and subject to much harsher penalties.

After Wednesday's vote, activists have urged to follow-through and finally designate the IRGC.

That included Iranian-Canadian dissident Hamed Esmaeilion, who lost his wife and daughter in January 2020, when the IRGC shot down Ukrainian Flight PS752 minutes after takeoff from Tehran.

The downing killed all 176 people onboard, which included 55 Canadian citizens and 30 permanent residents.

During the 4-year commemoration ceremony for the victims of the downing of PS752, Trudeau said his government is looking "for ways to responsibly list the IRGC as a terrorist organization."

Iran Continues to Target Canada in Cyber Operations

The CSIS report also said that cyber attacks carried out by the Islamic Republic target Canada.

“Iran combines offensive cyber operations with cyber-enabled influence operations to assist in the pursuit of its geopolitical goals,” according to the CSIS report. “Canada remains a target for opportunistic credential harvesting, phishing attacks, and exploitation of digital infrastructure to facilitate future targeting opportunities against individuals of interest.”

According to Microsoft's Threat Analysis Center (MTAC), Iran, Russia, and China will likely try to influence elections in the US and elsewhere in 2024.

In February, Iranian-Canadian MP Ali Ehsassi called for an investigation into Tehran's possible interference in the election.

“Given the catalog of malign and illegal activities committed by the Islamic Republic of Iran on Canadian soil, it would be naïve to believe that the Iranian regime has any compunction to shape public opinion in Canada,” he wrote to the Foreign Interference Commission, requesting testimony and relevant documents from Iranian-Canadians and others with substantial interests in the case.

Public Outcry in Iran as Government Ramps up Internet Disruptions

May 10, 2024, 16:23 GMT+1
•
Iran International Newsroom

The tightening of internet restrictions in Iran has caused widespread disruptions and a slowdown in internet speeds, impacting various regions across the country.

In voice messages shared with Iran International, Iranian citizens are expressing their frustrations and emphasizing the impact of the disruptions, highlighting the government's use of internet control as a means of suppression.

A report from Filterbaan, an organization monitoring internet access in Iran, noted that since Sunday, there have been significant disruptions in access to various data centers within the country.

Human rights groups, including Amnesty International, have said that the disruptions are a way for the Islamic Republic to suppress dissent and cover up its human rights violations.

Amid reports that he plays a central role in censoring the Internet, Iran’s President Ebrahim Raisi, spoke at the inauguration of an optical fiber project in the city of Qom.

Despite those reports, Raisi instructed the Minister of Communications to ensure that internet speeds are continuously improved.

"No one, even those in the gaming industry, should be annoyed by the internet. These annoyances are not good," Raisi said.

Assessments by Filterbaan suggest that the ongoing disruptions result from government policies aimed at deliberately not developing external bandwidth in proportion to user expansion, along with repeated increases in internet prices.

These measures are part of a broader strategy, Filterbaan says, to establish a comprehensive national information network that forces users to rely on domestic platforms while restricting access to VPNs.

Due to government filtering policies, platforms like Instagram, X, Facebook, and Telegram have long been inaccessible in Iran, impacting millions who cannot work and affecting numerous small businesses that rely on social networks.

Australian High Court Upholds Detention of Iranian Asylum Seeker

May 10, 2024, 15:05 GMT+1
•
Iran International Newsroom

Australia’s High Court has ruled against the release of an Iranian asylum seeker, who has been in immigration detention since he resisted deportation in 2018.

Identified only as ASF17, the Iranian man argued that his detention was punitive.

He has also claimed that deportation would pose risks due to his sexual orientation and that he feared indefinite detention.

The Iranian man’s lawyers had hoped to use a precedent involving another asylum seeker – a Rohingya man. ​​That ruling found that the indefinite immigration detention for people with no reasonable prospect of deportation was unlawful.

In ASF17’s case, the court ruled that since there is a "real prospect of removal" his detention was lawful.

Australia’s High Court seemingly differentiated ASF17's case based on his non-cooperation.

The court stated that ASF17's return to Iran could be facilitated if he agreed to cooperate with the process of obtaining necessary travel documents from Iranian authorities.

"He has decided not to cooperate. He has the capacity to change his mind. He chooses not to do so," the justices noted, unanimously agreeing that his detention remains lawful under such circumstances.

Australia’s Immigration Minister Andrew Giles supported the court's decision, emphasizing that the government had vigorously defended its stance.

He highlighted the case's implications for broader immigration policies, stating, "We welcome today’s unanimous decision of the Court, which has found that individuals who are not cooperating with their own removal are able to remain in immigration detention until they are removed from Australia."

Australia has a policy of mandatory detention for all unauthorized arrivals. The policy applies to those who arrive without a valid visa, including asylum seekers who often resort to dangerous sea journeys arranged by smugglers.

Once intercepted, individuals are typically placed in immigration detention centers while their refugee claims are processed. This process can be lengthy, sometimes lasting for years, which often results in significant mental and physical health issues among detainees.


Iranian Politician Says Tehran Might Already Have Nukes

May 10, 2024, 13:29 GMT+1
•
Iran International Newsroom

Iran might already possess a nuclear weapon, an insider politician in Tehran said on Friday, after remarks by a senior foreign policy figure the day before about a possible change in nuclear policy.

Ahmad Bakhshayesh Ardestani, re-elected to parliament in March, conveyed to the Rouydad 24 website his belief that Iran's decision to risk attacking Israel in April stemmed from its possession of nuclear weapons.

Moreover, he drew attention to remarks by Kamal Kharrazi, senior foreign policy advisor to Supreme Leader Ali Khamenei on Thursday, who said that Tehran will change its nuclear doctrine if Israel attacks its atomic facilities. For years, the Islamic Republic has insisted that its nuclear program is entirely peaceful, despite enriching uranium to 60-percent purity, which can only have a weaponization purpose.

“In my opinion, we have achieved nuclear weapons, but we do not announce it. It means our policy is to possess nuclear bombs, but our declared policy is currently within the framework of the JCPOA. The reason is that when countries want to confront others, their capabilities must be compatible, and Iran's compatibility with America and Israel means that Iran must have nuclear weapons,” Ardestani was quoted as saying.

Lawmaker Ahmad Bakhshayesh Ardestani  (undated)
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Lawmaker Ahmad Bakhshayesh Ardestani

Clearly putting Iran in the same trench as Russia, Ardestani added, “In a climate where Russia has attacked Ukraine and Israel has attacked Gaza, and Iran is a staunch supporter of the Resistance Front, it is natural for the containment system to require that Iran possess nuclear bombs. However, whether Iran declares it is another matter.”

The conservative politician, hailing from Isfahan Province, representing a district close to the Natanz nuclear facility, is a trusted regime figure, because he was allowed to run and win in the tightly orchestrated March parliamentary elections.

Ardestani, 63, has served in the government in various capacities since his youth from the early 1980s, and was a close ally of former President Mahmoud Ahmadinejad. It is not clear if he is a member of the hardliner Paydari party, dominating the newly elected parliament, but he also served a four-year term from 2012-2016 as an Ahmadinejad supporter. He is known as a foreign policy expert who managed foreign students sent abroad by the government.

On Thursday, Kamal Kharrazi was quoted by the semi official ISNA news website as saying, “If they [Israel] dare to strike Iran's nuclear facilities, our level of deterrence will change. We have experienced deterrence at the conventional level so far. If they intend to strike Iran's nuclear capabilities, naturally, it could lead to a change in Iran's nuclear doctrine.”

Kharrazi's statement seemed designed to be a deterrence to any Israeli plans to attack its nuclear facilities. Although he also threatened a change of doctrine if Iran’s existence is threatened, any Israeli attack will most likely be aimed at valuable strategic targets, not at obliterating Iran. It is possible that Supreme Leader Ali Khamenei’s advisor was referring to possible Israeli threats against the regime and its leaders, not the existence of Iran as a country.

On April 18, a senior IRGC commander had also warned that Tehran could change its nuclear policies if Israel continues to threaten to attack Iran’s nuclear sites.

“If the fake Zionist regime wants to use the threat of attacking nuclear sites to put pressure on Iran, it is possible and conceivable for the Islamic Republic to revise its nuclear doctrine and policies, and deviate from its past declared considerations,” said Ahmad Haghtalab, who oversees the security of Iran’s nuclear sites.

‘Free Toomaj’: Global Icons Back Iranian Rapper Sentenced to Death

May 10, 2024, 11:31 GMT+1
•
Iran International Newsroom

Over 100 prominent voices from the music, cultural, and human rights realms have joined forces to call for the immediate release of Iranian rapper Toomaj Salehi – a dissident sentenced to death over his support of nationwide anti-regime protests.

Signatories include international artists Coldplay, Sting, Jade Thirlwall of Little Mix, writer Margaret Atwood, and former Iranian-British hostage and campaigner Nazanin Zaghari-Ratcliffe.

“No artist should be subject to any kind of judicial harassment for exercising their right to freedom of expression, much less be sentenced to death,” their statement said on the Index on Censorship’s website.

Toomaj, known by his first name, has been a long-time critic of the regime in Iran and rose to further prominence when he spoke out in support of the 2022 Women, Life, Freedom protests in Iran.

Over the years, the rapper gained a considerable following through his music and lyrics, which criticized the Iranian state and its human rights violations.

He was one of the first dissidents abducted and detained in the Iranian authorities’ crackdown on the nationwide demonstrations.

“We are living somewhere horrific. You are dealing with a mafia that is prepared to kill an entire nation in order to keep its power, money and weapons,” the rapper told CBC News in an exclusive interview, shortly before his arrest.

Toomaj spent over a year in detention, which included 252 days in solitary confinement.

"As artists, musicians, writers and leading cultural figures we stand in solidarity with Toomaj Salehi. We call for his death sentence to be immediately and unconditionally quashed and for him to be released from detention without delay, with all other charges dismissed. Art must be allowed to criticize, to provoke, to question and to challenge authority. That is both our right and our duty as artists,” the statement by the world renowned figures read.

Following Toomaj’s release on bail in November 2023, the rapper recounted his experiences of torture in a video posted to YouTube. He was quickly re-arrested on charges of "corruption on earth."

Isfahan’s non-independent Islamic Revolutionary Court sentenced the rapper to death on April 24.