The National Iranian Oil Co. said it wanted to sell natural gas associated with oil production rather than burn it off, a practice known as flaring.
Shamsollah Bahmani, the spokesman for Parliament's Energy Committee, said more than 1.4 billion cubic feet of natural gas is burned off per day on average in Iran.
"This issue has damaged our national interests from two perspectives. On the one hand, burning associated gas equals energy loss while it can serve the petroleum industry," he was quoted as saying Monday by the Oil Ministry's news agency, Shana. "On the other hand, burning associated gas will significantly harm the environment."
NIOC said associated natural gas could be sold at a discount to members of the industrial sector in Iran. The company said distribution of associated gas may be delayed because most of Iran's oil fields are scattered across the country. At least $8 billion would be needed to develop the necessary infrastructure.
Iran holds the second-largest natural gas reserves and fourth-largest oil reserves in the world.