MINERALS YEARBOOK, 1978-79500 
 
natural gas to the U.S.S.R.'were also severely curtailed, and were estimated
at about 56% of the contracted volume in July 1979. Production in early 1978
was about 5.6 billion cubic feet per day. About 48% of the gas was being
flared, compared with 90% in the early 1960's. About 31% of the gas utilized
was used in the secondary petroleum recovery, gas-injection program~ 30%
was being exported to the Soviets through the IGAT-1 pipeline, 10% was used
domestically, and about 17% was used as feedstock for naturalgas liquids
and petrochemicals." Natural gas deliveries to IGAT-I ceased in October
1978,
started again on November 19, only to be terminated again in early 
1979. Prerevolutionary levels of daily gas exports to the U.S.S.R. stood
at 895.6 million cubic feet daily. During 1979, there was a shortage of associated
gas for export because of reduced crude oil production. The export portion
of the IGAT-II pipeline project was canceled because it was considered uneconomical
and not in the nation's interest. 
 In 1978, NIOC announced that gas reinjection in the Khuzestan oilfields
had raised the oil recovery factor ' by 5% to 10%. Without these secondary
recovery measures, oil pressures and production in these fields would drop.
Gas requirements for the injection program were expected to amount to 8 billion
cubic feet per day, but this demand may be modified under the new national
directive. This program was' approved for continuing under the new Government;
but, by yearend 1979, maintenance in the oilfields was virtually nonexistent
and oil pipeline after pipeline throughout the country was being shut down.

 By yearend 1978, the LNG (liquefied natural gas) deal with Columbia Gas
Systems of the United States was shelved. The Kvaener Group of Norway, as
builder and financier of the plant, also withdrew. Columbia and Consolidated
Natural Gas, which became joint purchaser of the LNG, were to renegotiate
price with NIGC while a new plant builder was sought,12 but by yearend 1979
negotiations had ceased. 
 Agreements for the supply of LNG to Japan were signed in 1978 for NIGC to
supply Japan Kalingas with 2.8 million tons per year over 20 years starting
in 1982. A group of Japanese companies (Mitsubishi Heavy Industries, Ishikawajima-Harima
Heavy Industries, Hitachi Shipbuilding, and Kobe Steel) were to construct
the $762 million liquefaction plant that reportedly 
would be ready for operation by 1982. R.J. Brown and Associates were to design
and engineer the Pars field gas-gathering system that would move gas from
six offshore complexes to an onshore terminal where the con,densate would
be piped to the Kahngas LNG plant. By 1979, however, the Kahinges project
was reported canceled. 
 The Joint-Stock Ocean Co. of Iran, a joint venture formed in 1975-76 with
NPIC and the Ocean Gas Co~ of France, received the first Iranian ship designed
to transport liquefied gas and ammonia in early 1978. Called the Razi, the
ship had a 70,000-cubicmeter capacity and would make its first commercial
trip from Kuwait and Saudi Arabia to the United States, In October 1979,
two new gas finds near Gachsaran were announced by NIOC and were a sign that
the NIOC exploration program was again functioning. 
 Nuclear Energy.—By early 1979, Iran had decided to scrap its ambitious
nuclear energy program. The, decision affected the $3.6' billion two atomic
powerplants at Büshehr that were being constructed by Kraftwerk
Union,
a subsidiary of Siemens AG of the Federal Republic of Germany. The Iranian
Labor Ministry refused to renew the work permits for 200 Germans working
at Büshehr, and two installments of $495 million each had not been
paid.
By July 28, ' 1979, Kraftwerk Union withdrew from the project to cut further
losses. Work on the plants was 80% complete, and they had been expected to
go onstreani in 1980, producing 2.4 million kilowatts of electricity. Iran
had already paid $2.87 billion .to Kraftwerk for the project construction~
The new revolutionary Government believed the project to be too costly to
maintain. Framatome of France was also affected by this decision as it had
contracted for two nuclear plants at a cost of $2.03 billion. The French
had been arranging a barter-for-oil deal in payment for the plants. 
 At mid-1978, Australia and Iran signed a nuclear safeguard pact on the supply
of uranium ore. The agreement followed 4 years of interrupted negotiations.
Deliveries of 15,000 tons yearly of uranium were to be supplied over a 5-year
period beginning in 1980. Preliminary initialing of a final nuclear nonproliferation
treaty was also carried out in 1978 with the United States after 2 years
of negotiations. An Iranian concession not to purchase a reprocessing plant
had broken the negotiations deadlock. By yearend 1979, however, the need
for such quantities of uranium was in doubt.