Iran is on course to become the world's largest importer of natural gas by 2025 unless it can rein in rampant domestic demand, the head of research at the country's energy ministry told a conference in Tehran.

Iran sits on the world's largest gas reserves, according to estimates by BP, and Iranian energy officials have boasted for years about becoming a top gas exporter soon.

Thawing relations with the West since President Hassan Rouhani came to power in mid-2013 have revived hopes that Iran may one day help meet growing gas demand around the world.

But slow progress in developing those reserves over the last decade has stunted gas exports. Meanwhile, domestic consumption is surging as the gas network has grown and more gas is needed to sustain output from ageing oilfields.

The country faces severe shortages because production has failed to keep pace with residential and industrial demand.

Unless something drastic is done to control use, which has forced Iranian power plants to burn billions of dollars of relatively costly liquid fuels, the holder of the world's biggest gas reserves could become the largest importer.

"Should the current energy consumption procedure not change, by 2025 Iran will be the largest natural gas importer in the world," Hamid Katouzian, head of Iran's Ministry of Petroleum Research Centre, was quoted by Mehr news agency as saying.

One of the biggest problems Iran faces is that its fossil fuel-fired power plants have efficiency rates of just 13 per cent, compared to 60-70 per cent achieved by modern plants in other parts of the world, Katouzian said.-Reuters