Iran additionally needs to quickly expand its existing gas production facilities and finalize nascent plants to keep up with the ongoing rise in global demand for natural gas. This is particularly the case with reference to liquefied natural gas (LNG), which provides exporters and clients alike with more flexibility in transportation and storage.
Just last month, Iran hosted the third summit of the Gas Exporting Countries Forum. Most of the participants showed a noteworthy interest in increasing their exports. In this vein, South Pars phases 15 and 16 will provide Iran with more flexibility to expand its export capacity not only through pipelines such as the recently agreed-upon Iran-Oman-India undersea pipeline, but also via future LNG shipments. These phases will assist Iran in expanding its export capacity, particularly in the case of a technical breakdown in other phases of South Pars.
Getting phases 15 and 16 of South Pars fully up and running will clearly send the message to new — and existing — clients that the Oil Ministry is capable of supplying more gas, and that Iran’s declared plans are not merely words. Importantly, Iran can also use its gas exports as a stabilizing factor in its relations with clients, and particularly those in the Middle East and the Caucasus.
On a domestic level, beside the economic benefits of the project, phases 15 and 16 of South Pars have a significant place in the Islamic Republic’s narrative of self-sufficiency (khodkafaee). Although these phases are not the largest producing phases, they are indeed phases that have been largely developed by local firms. After the intensification of Western sanctions in 2011, several foreign contractors left South Pars.