President Khatami has presented a draft budget to the Majlis for FY 1999. The budget is based on a forecast price of oil at $11.80/bbl (Iranian crude was actually selling at about $9/bbl in January 1999, but this has risen with OPEC's March agreement to cut oil production). Low oil prices during 1998 exacerbated Iran's budget shortfall, which is a chronic problem in part due to large-scale state subsidies -- totaling some $11 billion per year -- including foodstuffs and especially gasoline (see below). Iran's budget for FY 1999 forecasts $12.1 billion in revenues from energy exports, including $10.61 billion from crude oil and $1.47 billion in oil products and natural gas.

The U.S. Iran-Libya Sanctions Act (ILSA), signed into law by President Clinton in August 1996, imposes mandatory and discretionary sanctions on non-U.S. companies investing more than $20 million annually (lowered in August 1997 from $40 million) in Iran's oil and gas sectors. Previously (in early 1995), President Clinton had signed two executive orders which prohibited U.S. companies and their foreign subsidiaries from conducting business with Iran. The orders also banned any "contract for the financing of the development of petroleum resources located in Iran." As a result, U.S.-based Conoco was obligated to abrogate a $550-million contract to develop Iran's offshore Sirri A and E oil and gas fields. After Conoco pulled out of the Sirri project, France's Total and Malaysia's Petronas were awarded the contract. On August 19, 1997, President Clinton signed Executive Order 13059 reaffirming that virtually all trade and investment activities by U.S. citizens in Iran was prohibited.

Despite ILSA, a corporate consortium including Total, Petronas and Russia's Gazprom proceeded with a $2 billion investment in Iran's South Pars offshore gas field in 1997. In May 1998, the U.S. government announced that it was granting a sanctions waiver to the consortium for South Pars. The United States emphasized that this waiver would apply only to firms of European Union (EU) countries, in return for high levels of cooperation on matters of U.S. national security concern, such as efforts to restrict the proliferation of weapons of mass destruction. The United States also clarified that the waiver policy did not apply to the construction of oil and gas pipelines through Iranian territory. For its part, the EU maintains that ILSA is "unacceptable" and has barred European countries from complying with it.

OIL
Iran holds 93 billion barrels of proven oil reserves, or roughly 9% of the world's total. The vast majority of Iran's crude oil reserves are located in giant onshore fields in the Khuzestan region near the Iraqi border and Persian Gulf terminus. More than half of Iran's 40 producing fields contain over one billion barrels of oil. The onshore Ahwaz, Marun, Gachsaran, Agha Jari, and Bibi Hakimeh fields alone account for about two-thirds of Iran's oil production. Most of Iran's crude oil is medium gravity and low in sulfur. Iran has not had significant oil exploration activity in nearly 3 decades.

In December 1998, President Khatami called for the modernization of Iran's oil industry and the discovery of new oil fields in the country. In January 1999, Khatami approved a plan to restructure the industry, including decentralization and the separation of policy from executive affairs. According to press reports, the plan calls for "fundamental changes in management." Also in January 1999, the Majlis ordered the oil ministry to file monthly reports on the amounts of crude, refined products and gas exports. The report will track Iran's actual revenues from these sales against projections.

The National Iranian Oil Company (NIOC) recently has focused on frontier exploration efforts in the hopes of adding 1-2 billion barrels of proven reserves by 1999. NIOC's current five-year plan calls for drilling 37 onshore and 24 offshore Persian Gulf exploration wells by 2000. Since 1995, NIOC has made several sizable oil field discoveries. These include the Darkhoven oil field, which is located offshore Abadan and contains 2.5 billion barrels of low sulfur, 39° API crude oil. NIOC hopes to start production from Darkhoven in 1999, with an initial production of 30,000 barrels per day (bbl/d) and a second phase peak of 60,000 bbl/d. Production goals are still uncertain, though, and further appraisal is required, as target reservoir depths are more than 15,000 feet. Near Ganaveh, NIOC also found two onshore oil fields holding combined reserves of 100 million barrels.

Production
Iran is OPEC's second-largest oil producer, with average 1998 crude oil production of 3.6 million bbl/d. Iran's current sustainable production capacity is estimated as high as 4 million bbl/d, but this figure is controversial since Iran may have maintained production levels at some older fields only by using methods which have permanently damaged the fields. In December 1997, Oil Minister Zanganeh stated that the country aimed to boost oil production capacity 200,000-250,000 bbl/d each year, possibly surpassing 6 million bbl/d by 2010. Some observers are skeptical about whether this goal, which would nearly restore the country's production capacity of the mid-1970s, is possible.

In any case, Iran's actual production is limited by OPEC policy. In June 1998, Iran agreed to reduce its production by 305,000 bbl/d. According to OPEC, this cut was to be implemented from a base production level of 3.623 million bbl/d, which would bring Iran's production quota to 3.318 million bbl/d. Iran disagreed, claiming that the cut in production should be based on a higher output level of 3.94 million bbl/d, which was established at the 1997 OPEC meeting in Jakarta. In March 1999, Iran and other OPEC countries (led by Saudi Arabia) reportedly resolved this dispute by accepting Iran's higher baseline figure. Iran agreed to a further cut of 7.3%, or 264,000 bbl/d, within the framework of a new round of OPEC production cuts finalized on March 23. As of April 1, 1999, Iran's new production quota was set at 3.359 million bbl/d.

Onshore Developments
In contrast to Iran's efforts to bring new offshore fields online, NIOC's onshore field development work is concentrated mainly on sustaining output levels from large, aging fields, largely through enhanced oil recovery (EOR). In addition, NIOC recently has brought several relatively small onshore fields online, including the 50,000-bbl/d Nargesi, 10,000-bbl/d Kilur Karim, and 5,000-bbl/d Karangan fields. Iran also is developing new reservoirs at fields such as Bibi Hakimeh, where deep formations at 13,000 feet have been proven to contain light, 37° API crude oil.

Gas injection projects are expected to increase onshore oil production capacity at least 300,000 bbl/d by 2000. Most of this increased capacity will come from the 570,000-bbl/d Marun field, the 130,000-bbl/d Karanj field, and the presently inactive Parsi fields. Water encroachment and severe pressure problems have restricted oil production at these fields. Limited access to foreign investment has led to the use of local Iranian service companies for technical reservoir work at onshore fields. Due to financial and technical constraints, this has resulted in prolonged delays in capacity additions at fields like the 15-billion barrel (in-place) Parsi field. At the Karanj field, gas injection facilities were successfully installed in 1995, but expected output in the range of 225,000 bbl/d has failed to materialize. In early March 1998, President Khatami inaugurated a second phase of gas injection at Karanj, designed to boost recovered oil reserves by 1 billion barrels.

At other fields, EOR programs will require sizeable amounts of natural gas, infrastructure development, and financing. For example, gas injection programs at the 31-billion barrel (in-place), 150,000-bbl/d Agha Jari field, while leading to an increase in recoverable reserves of 4-5 billion barrels, could require 15 Tcf of gas during the field's remaining life. Gas-related EOR programs at Agha Jari, as well as at the Binak, Kupal, and Ramshahr fields, are dependent upon development of Iran's non-associated gas reserves in the South Pars and North Pars fields in the Persian Gulf. Independent sources estimate that NIOC's gas injection programs will require 100 Tcf.

Although NIOC has run into difficulties in implementing EOR programs at some of the fields mentioned above, it has been successful in many other cases. One example is NIOC's development work at Gachsaran, which contains in-place reserves of 53 billion barrels. The field currently has a gas injection capacity of 1.5 billion cubic feet per day (Bcf/d), or almost 15% more than the field's present associated gas production. After a new, untapped, oil-bearing structure underlying existing producing formations is brought online, NIOC anticipates that production will be ramped up from 600,000 bbl/d to 750,000 bbl/d.

Offshore Developments
As of 1998, Iran produced about 500,000 bbl/d of crude oil from eight operational offshore fields. Since 1993, NIOC's extensive development and refurbishment efforts have boosted offshore capacity by about 150,000-200,000 bbl/d. The Doroud 1&2 (146,000 bbl/d), Salman, Abuzar, Forozan, and Sirri C&D fields comprise the bulk of Iran's offshore output, all of which is exported. Iran plans extensive development of existing offshore fields and hopes to raise its offshore production capacity to 1 million bbl/d by 2000. Development of new offshore Persian Gulf and Caspian Sea oil fields could require investment of $8-$10 billion.

The 105-million barrel Balal field was discovered in the 1970s by an ARCO/Murphy consortium, but was nationalized along with the rest of Iran's offshore oil industry during the 1979 Islamic Revolution. Balal was never developed even though an oil pipeline connecting the field to the Lavan Island export terminal was laid. Balal contains two reservoirs: a larger, shallow formation ("Arab/Hith") holding 42° API crude; and a smaller, underlying zone ("Khatia") holding heavier 28° API oil. As mentioned above, Canada's Bow Valley Energy Ltd. is now conducting detailed engineering work, including a 3-D seismic survey, on the Balal field. Initial production is scheduled to begin in 1999 at 12,000-15,000 bbl/d, plateau at 40,000 bbl/d, and last around 15 years. Balal likely will require extensive water injection and other secondary recovery methods, especially in later years.

Soroush is located about 50 miles west of Kharg Island and contains estimated recoverable reserves of 400 million barrels. The field contains three reservoirs, two of which hold heavy 19° API oil. It received severe damage early in the Iran-Iraq War, and its 25,000 bbl/d production capacity has been shut-in since 1979. NIOC's $200-million development plan includes replacement of a 2.4-million barrel floating production, storage, and off-loading vessel (FPSO) and refurbishment of the field's main production platform and eight well protector platforms. Italy's Edison SpA is bidding for a contract to develop one oil well in the Soroush field, which would increase the well's capacity from 60,000 bbl/d to 100,000 bbl/d.

NIOC also would like to develop five oil and gas fields in the Hormuz region (Henjam A (HA), HB, HC, HD, and HE), the A field near Lavan Island, the Esfandir field near Kharg Island, and two structures near the South Pars gas field. According to NIOC, the five Henjam fields hold an estimated 400 million barrels of oil and have a production potential of 80,000 bbl/d.

Terminals
All Iranian onshore crude oil production and output from the Forozan field (which is blended with crude streams from the Abuzar and Doroud fields) is exported from the Kharg Island terminal located in the northern Gulf. Kharg's original capacity of 7 million bbl/d was nearly eliminated by more than 9,000 bombing raids during the Iran-Iraq War. In December 1998, Iran announced plans to boost production at its Abu-Zar jetty by one-third, up to 200,000 bbl/d from the 150,000 bbl/d before the Iran-Iraq war. Iran plans to add five more platforms to the jetty, which now includes three platforms and two pedestals. In addition, the four single-buoy moorings installed at Ganeveh during the war have a combined capacity of 1 million bbl/d. Smaller amounts of offshore crude oil production from the southern Persian Gulf are exported from terminals on Lavan Island and Sirri Island. Iran also has unused terminals at Cyrus and Ras Bahregan in the southern Gulf. In June 1995, the 60,000-dwt capacity Abadan product terminal was re-opened after having been shut-in since the Iran-Iraq War.

Refining
As of January 1999, Iran had nine operational refineries with a combined capacity of 1.45 million bbl/d. In order to meet burgeoning domestic demand for middle and light distillates, Iran has imported refined products since 1982. While these product imports reached more than 150,000 bbl/d in 1994, they have since subsided due to debottlenecking work at the Isfahan, Tabriz, Shiraz, and Lavan refineries during the past several years. In late 1996, Iran was importing about 50,000 bbl/d of light products, while at the same time, exporting fuel oil and other heavy products.

The 220,400-bbl/d Bandar Abbas refinery, located near the Strait of Hormuz, is being supplied mainly with heavy crude from Kharg Island and with smaller amounts of condensate from the nearby Sarkhoon field. When full production is achieved, the refinery will produce 7,100 bbl/d of liquefied petroleum gas (LPG), 46,100 bbl/d of gasoline, 36,200 bbl/d of kerosene and jet fuel, 69,500 bbl/d of gas oil, 66,900 bbl/d of fuel oil, 5,000 bbl/d of asphalt and 124 tons per day of sulfur.

Iran optimistically hopes to boost its refining capacity to almost 2 million bbl/d by 1999. Two planned grassroots refineries include a 225,000-bbl/d plant at Shah Bahar and a 120,000-bbl/d unit on Qeshm Island. The $3-billion Shah Bahar refinery project was approved by the government in late 1994 and would be built by private investors. The $1.8-billion Qeshm Island refinery project is to be built by Swiss company Super Petroleum. Belgian-based Unit International is planning to build Iran's first privately-owned oil refinery. The 100,000 bbl/d plant will refine crude oil from Kazakhstan and Turkmenistan. The refined products will be purchased by the Iranian government.

NIOC has proposed a series of downstream investments in India, including two new oil refineries in southern India, port facilities for the movement of petroleum products and a 350-MW power project to support the refineries. NIOC already holds a 16% stake in Madras Refinery Ltd., which has three different units with a total capacity of around 6.4 million tons a year. Pakistan has revived a $1.1 billion refinery project with Iran that had been postponed since 1991. The 6 million tons per year (t/y) plant will be built in Hub, Baluchistan. In March 1998, the Iranian construction minister announced that an Iranian company was considering building an oil refinery in Bangladesh. Iran also has discussed possible cooperation on refinery ventures with the Philippines.

NATURAL GAS
Iran contains an estimated 812 trillion cubic feet (Tcf) of natural gas reserves -- the world's second largest (next to Russia). Although most Iranian gas reserves are non-associated (i.e., not found along with oil), large onshore oil fields contains approximately 120 Tcf of associated gas, which is either dissolved in crude oil or is in gas caps.

Iran's largest non-associated gas is the South Pars field, which is an extension of Qatar's 241-Tcf North Field. South Pars was first identified in 1988 and originally appraised at 128 Tcf in the early 1990s. However, NIOC-sponsored studies conducted in mid-1996 indicate that South Pars contains an estimated 240 Tcf, of which a large fraction will be recoverable, and at least 3 billion barrels of condensate. Iran's other sizable non-associated gas reserves include the offshore 47-Tcf North Pars gas field (a separate structure from South Pars), the onshore Nar-Kangan fields, the 13-Tcf Aghar and Dalan fields in Fars province, and the Sarkhoun and Mand fields.

In 1996, Iran produced about 2.6 Tcf of natural gas. Of this amount, 1.3 Tcf was marketed, 1 Tcf was re-injected, and 0.3 Tcf was flared. In 1990, Iran undertook an ongoing gas utilization program that is designed to boost production to 10 Tcf per year by 2010, reduce flaring, provide gas for EOR re-injection programs, and allow for increased gas exports abroad.

The dual Aghar-Dalan field development has been one of National Iranian Gas Company's (NIGC) recent successful gas utilization projects. After coming online in mid-1995, the Aghar and Dalan fields produce approximately 600 million cubic feet per day (Mmcf/d) and 800 Mmcf/d, respectively. Gas from both fields is processed at a $300-million gas processing facility at the Dalan field, which is also the location of a 40-MW, gas-fired power plant. Most of the treated gas from the Dalan processing plant is carried through a 212-mile pipeline for re-injection in the Marun field and other oil fields in Khuzestan province.

New Field Development Projects
On September 29, 1997, Total signed a $2 billion deal (along with Russia's Gazprom and Malaysia's Petronas) to explore South Pars and to help develop the field during Phase 2 and 3 of its development. NIOC estimates that South Pars has a gas production potential of up to 8 billion cubic feet per day (Bcf/d) from four individual reservoirs. The company has a three-phase development for South Pars. Phase I, currently scheduled for completion by the end of 2000, involves production of 900 million cubic feet per day (Mmcf/d) of natural gas and 40,000 bbl/d of condensate. This first phase is being carried out by the Petroleum Development and Engineering Company (PEDEC), an affiliate of NIOC.

In March 1997, Iranian Oil Minister Gholamreza Aghazadeh stated that the three-phase South Pars development would proceed concurrently, with the three phases combined yielding 3 Bcf/d of gas, 120,000 bbl/d of condensate, and $3.5 billion a year in revenues when completed in 2001 or 2002. NIOC is developing Phase 1 of the overall project, while Total's consortium is responsible for Phases 2 and 3. Several firms are pursuing a buyback contract for South Pars Phases 4 and 5. One group includes Shell, Petronas, Gaz de France and Britain's BG; Australia's BHP and Russia's Gazprom are also competing for the project. All told, South Pars is expected to produce $35-$40 billion worth of gas over a 30-year period. According to the OPEC News Agency, a total of $930 million has been invested in the construction of the South Pars refinery. The construction was 21% completed in December 1998, and the plant is scheduled to be finished in 2001. The refinery is expected to generate $240 million in annual sales of gas liquids, sulfur and natural gas.

In addition to South Pars, Iran aims to develop the 6.4-Tcf, non-associated Khuff (Dalan) reservoir of the Salman oil field. Salman straddles Iran's maritime border with Abu Dhabi, where it is known as the Abu Koosh field. NIOC is seeking to develop the Khuff reservoir, which could lead to the production of 500 Mmcf/d of non-associated gas, along with the 120,000 bbl/d of crude oil that is now being produced from a shallower reservoir. Salman gas could either be exported to Dubai's Jebel Ali or to domestic locations at Qeshm Island and Badar Mogham. The project cost is estimated at slightly under $600 million for a two-platform development.

The 47-Tcf North Pars development will be integral to Iran's long-term gas utilization plans. In early 1994, Shell completed a feasibility study on the field. Development plans call for 3.6 Bcf/d of gas production, of which 1.2 Bcf/d would be re-injected into the onshore Gachsaran, Bibi Hakimeh, and Binak oil fields. The other 2.4 Bcf/d would be sent to the more mature Agha Jari oil field. Negotiations on the field stalled in 1995, but Shell reportedly renewed its interest in 1998.

In 1997, Iran and Oman agreed to joint development of the Henjam E (HE) field, which shares the same geological structure as Oman's Bukha West field. HE/Bukha West contains an estimated 1.15 Tcf of natural gas and about 80 million barrels of condensate. Production terms will be on an 80:20 basis, in favor of Iran. Two discovery wells have been drilled on the structure, in HE in the 1970s and in Bukha West in the 1980s. Eventual production could be tied to Oman's Bukha gas field farther south. The HE field may be offered to private investors under NIOC's proposed second round of buyback contracts.

Natural Gas Exports
Although Iranian natural gas consumption is growing rapidly, the country continues to promote export markets for its gas. Under current plans, NIOC optimistically hopes to export 450 Mmcf/d of gas by 2000, rising to 4,000 Mmcf/d by 2005 as larger, more ambitious projects come online. By 2000, NIOC plans to have completed gas export pipelines to Turkey, Armenia, and Nakhichevan. By 2005, lines to Europe and India are planned, in addition to the possibility of a liquefied natural gas (LNG) facility for producing exports to Asia. In 1996, Iran and Turkey signed a $20 billion agreement that calls for Iran to supply Turkey with natural gas over a period of 22 years, beginning in 1999 at an initial rate of 300 Mmcf/d and rise to a level of 1,000 Mmcf/d in 2005. In November 1998, Turkey began construction of a 623-mile pipeline that could transport gas westward from Iran. The Ezurum-Ankara line could also be used to transport gas from a pipeline from Turkmenistan running beneath the Caspian Sea. Construction of Iran's proposed IGAT 3 pipeline from South Pars to Turkey could cost $2-3 billion.

Iran increasingly is targeting emerging Asian markets like Pakistan and India for LNG exports. In January 1995, Iran and Pakistan signed a preliminary agreement for construction of a $3-billion, 870-mile, 1.6-Bcf/d onshore gas export pipeline linking South Pars with Karachi, Pakistan. Subsequently, a proposed extension to India led to security-of-supply concerns for the Indian government. In 1998, a consortium of Shell, British Gas, Petronas, and an Iranian business group known as the "Foundation for the Deprived and the War Disabled" reportedly was negotiating to export gas from South Pars to Pakistan. A committee is to be established in April 1999 to examine the possibility of a gas pipeline from Iran to India via Pakistan.

COUNTRY OVERVIEW
President: Mohammed Khatami (since August 1997)
Supreme/Spiritual Leader: Ayatollah Ali Khamenei
Chairman of the Expediency Council: Hashemi Rafsanjani
Independence: April 1, 1979 (Islamic Republic of Iran proclaimed)
Population (1999E): 66.5 million
Location/Size: Middle East - between the Persian Gulf and the Caspian Sea/636,296 square miles
Major Cities: Tehran (capital), Meshed, Isfahan, Tabriz, Shiraz, Ahwaz, Kermanshah, Qom, Ardebil, Qazvin
Languages: Persian and Persian dialects (58%), Turkic and Turkic dialects (26%), Kurdish (9%), Luri (2%), Baluch (1%), Arabic (1%), Turkish (1%), other (2%)
Ethnic Groups: Persian (51%), Azerbaijani (24%), Gilaki and Mazandarani (8%), Kurd (7%), Arab (3%), Lur (2%), Baluch (2%), Turkmen (2%), other (1%)
Religion: Shi'a Muslim (89%), Sunni Muslim (10%), Zoroastrian, Jewish, Christian, and Baha'i (1%)
Defense (8/97): Army (350,000), Revolutionary Guard (120,000), Navy (18,000), Air Force (30,000), army reserves (350,000)

ECONOMIC OVERVIEW
Currency: Rial (R)
Exchange Rates (1/99): R 1,753 per $U.S. for official budget transactions and essential goods imports and exports, as well as external debt service
Real Gross Domestic Product (GDP)(1999E): $28.5 billion
Real GDP Growth Rate (1999E): -1%
Inflation Rate (1999E): 14.2%
Current Account Balance (1999E): $0.91 billion
Major Trading Partners: Germany, Italy, Japan, France, Turkey, United Kingdom, Netherlands, Spain
Merchandise Exports (1999E): $15.14 billion
Merchandise Imports (1999E): $12.71 billion
Major Export Products: Petroleum and related products, carpets, pistachios
Major Import Products: Machinery, military equipment, metals, foodstuffs, pharmaceuticals, refined oil products, technical services
Oil Export Revenues (1998E): $10.2 billion
Oil Export Revenues/Total Export Revenues (1998E): 80%-85%
Total External Debt (1998E): $18.8 billion

ENERGY OVERVIEW
Minister of Energy: Habibollah Bitaraf
Minister of Oil: Bijan Namdar Zanganeh
Total Energy Consumption (1996E): 4.0 quadrillion Btu
Energy-related Carbon Emissions (1996E): 72.9 million metric tons (1.2% of world carbon emissions)
Proven Oil Reserves (1/1/99E): 90 billion barrels
Oil Production (1998E): 3.60 MMBD
OPEC Crude Oil Production Quota: 3.359 MMBD (as of April 1, 1999)
Sustainable Oil Production Capacity (1999E): 3.7-4.0 MMBD
Oil Consumption (1997E): 1.13 MMBD
Crude Oil Refining Capacity (1/1/99E): 1.45 MMBD
Net Oil Exports (1997E): 2.6 MMBD
Major Crude Oil Customers (1/99): Japan, South Korea, United Kingdom, China, Turkey, Thailand, India, Brazil, Taiwan
Natural Gas Reserves (1/1/99E): 812 trillion cubic feet (Tcf)
Natural Gas Production (1997E): 1.6 Tcf
Natural Gas Consumption (1997E): 1.6 Tcf
Recoverable Coal Reserves (12/96E): 213 million short tons (Mmst)
Coal Production (1997E): 1.3 Mmst
Coal Consumption (1997E): 1.7 Mmst
Net Coal Imports (1997E): 0.4 Mmst
Electric Generation Capacity (11/98E): 25 gigawatts
Electricity Production (1996E): 79.6 billion kilowatthours

OIL AND GAS INDUSTRIES
Organizations: National Iranian Oil Company (NIOC) - oil and gas exploration and production, refining and oil transportation; National Iranian Gas Company (NIGC) - manages gathering, treatment, processing, transmission, distribution, and exports of gas and gas liquids; National Petrochemical Company (NPC) - handles petrochemical production, distribution, and exports.
Major Foreign Oil Company Involvement: Gazprom, Petronas, Shell, Total
Major Oil Fields: Gachsaran, Marun, Ahwaz Bangestan, Agha Jari, Rag-e-Safid, Parsi, Bibi Hakimeh
Major Producing Oil: Ahwaz Asmari, Gachsaran, Marun , Agha Jari, Doroud 1&2, Rag-e Safid, Bibi Hakimeh, Ahwaz Bangestan, Karanj, Salman
Major Refineries (capacity, bbl/d) (1999E): Abadan (427,500), Isfahan (251,750), Bandar Abbas (220,400); Tehran (213,750), Arak (142,500), Tabriz (106,400), Shiraz 38,000), Kermanshah (28,500), Lavan (20,000)
Major Oil Terminals: Ganaveh, Kharg Island, Lavan Island, Sirri Island, Cyrus, Ras Bahregan, Larak Island
Gas Pipeline System: IGAT-1 transports associated gas from Khuzestan area oilfields to consumption centers in the north; IGAT-2 transports non-associated gas from the Kangan and Nar fields on the Persian Gulf coast near Bandar Taheri; IGAT-3, which would run from South Pars to Tehran, is planned.