Tehran, Oct 30, IRNA -- According to an energy expert, while Iran's gas is well placed geographically and has a highly potential competitive status in the gas market, the business is going to be increasingly competitive and restricted worldwide.

The senior energy analyst at the Center for Global Energy Studies in London, Julian Lee noted, "Countries around the world are now much more aware of the need to monetize their gas resources, whereas in the past many substantial oil producers used to flare their gas." There is also a lot of exploration around the world for new gas resources.

"Iran's gas is well placed geographically to capitalize on the gas industry, but so are many of its competitors, adding that while Iran is not at any significant disadvantage over its rivals, but there exists a highly competitive market for gas," he added.

Julian Lee believes that Iran has adopted looking first at its domestic utilization of gas resources to meet its growing emerging demands and to hopefully provide the basis for more diversified economy, away from a reliance purely on export of hydrocarbons and injection of gas into oil wells to boost the oil recovery.

"Iran has thus other alternatives for dealing with its gas, which might be missing by some of its competitors," said Lee.

Then he referred to Iran's gas infrastructure which is much more developed than that of other states of the Persian Gulf region.

The energy expert predicted that since new potential Liquefied Natural Gas (LNG) markets are opening up in Europe, Iran's gas export would go westwards rather than eastwards.

In reply to a question on whether Iran should single out certain options in the gas industry among different projects for domestic use, gas injection or export, he said, "Iran certainly has sufficient gas resources to pursue different projects including pipe and LNG, gas to liquid exports and meeting its domestic need simultaneously."

On the pipeline project for Iran's gas, he said Pakistan is the most obvious and easiest market, but the question yet remained to be answered is whether Pakistani market for imported gas is large enough to support building of a dedicated pipeline, without being able to supply India.

"It is quite clear that there are extremely political difficulties with shipping gas to India via Pakistan," he added.

As for the LNG export, Julian Lee remarked that the capital costs for the project is substantial, while there are certain advantages.

"In the case of LNG export, you are not necessarily dependent on a single client and as more countries are beginning to look to importing gas in the liquefied form, it is possible to diversify the client base," he said.

About the gas to liquid (GTL) projects whose studies are underway in the country, the energy expert said, "It is an attractive option but is still relatively expensive, while the advantage is that it can produce very high quality fuels with a market that exists at the moment in western Europe and perhaps in Japan."

On the possibility of emergence of an international market for gas mainly because of development of LNG spot market, he said that as the volume of LNG increases, the opportunities for a truly international market has greatly developed and more and more spot sales of LNG is very likely to take place.

On a question about the practicality of using compressed natural gas (CNG) as a fuel for vehicles, Lee referred to certain environmental advantages of this type of fuel, but noted that it is more suitable for fleet vehicles that travel along relatively short distances and are generally refuelled from a central point, but its use for private and specially small cars is much more complicated.

About the use of gas instead of oil, he believes that gas is a very good fuel for stationary uses like power generation, but because of its less dense nature compare to oil, it can be considered as a good transportation fuel.

Lee believes that the transportation sector is, in fact, the last bastion of the oil market.

He is among dozens of energy experts attending an international experts meeting held in Tehran during the last two days sponsored by the national Iranian gas company.