Policy and legal frameworks for underground natural gas storage in Iran

Underground natural gas storage is a process with operational and economic benefits that balances a variable demand market with a constant energy supply. It increases gas service reliability at peak periods and enables the suppliers to meet gas demands. Thus, the sufficiency and responsiveness of existing policy and legal framework for developing underground gas storage to provide reliability to industry players require deep analysis. Iranian policymakers set out policies regarding gas storage as an economic decision to manage prospective risks associated with the gas market. However, comprehensive and integrated policies and strategic plans for underground gas storage are not set out to the required extent. Therefore, enacting specific, comprehensive, and integrated laws and regulations is imperative to consider the unique characteristics of underground gas storage. Enabling third-party access to gas storage facilities as a sectoral regulatory mechanism could guarantee competition. In addition, the role of constructive contractual arrangements for developing underground gas storage, founded on the sector's laws and regulations, as a complementary tool to attract investment should not be overlooked. The transfer of ownership of gas and facilities under such contractual arrangements could facilitate the process, incentivizing investment.