Iran's National Gas Company Showing Renewed Interest in EU Markets

EghtesadOnline: Although cold weather usually sweeps through large parts of Iran in the winter seasons, export of natural gas to neighboring countries continues as agreed and it is likely that Europeans could also be interested in importing gas from Iran as a reliable supplier.

News ID: ۷۴۶۵۲۴

20 January 2019

Hassan Montazer-Torbati, the newly-appointed head of the National Iranian Gas Company, made the statement in a press briefing in Tehran on Saturday, ILNA reported.

NIGC is able to export as much as 30 billion cubic meters of gas a year to markets in the European  Union, he said, referring to available routes for export he named Turkey, Syria, Azerbaijan, Armenia and Georgia as options.

"NIGC has the trust of European importers as they regularly monitor Iran’s gas market. We remain strongly committed to our clients, namely Turkey and Iraq," Financial Tribune quoted Montazer-Torbati as saying.

Total Iranian gas export (40 million cubic meters a day) flows through pipelines to Turkey and Iraq. This is dwarfed by its total production of 880 mcm/d, most of which is consumed domestically.

The NIGC chief, however, did not reflect on the cost and benefit or the economic viability of the multibillion-dollar pipelines needed to export gas to Europe plus the tough competition to attract customers in that part of the world.

Experts including Mohammad Hossein Adeli, the former secretary- general of the Gas Exporting Countries Forum, believe Europe is a difficult market to tap because Russia is the single largest [gas] supplier to Europe with more than 33% market share.

According to Adeli, export via pipelines will no doubt be cheaper, but more often than not it comes with political considerations. "Liquefied natural gas allows Iran to sell anywhere in the world without dealing with political baggage."

For years officials in Tehran have talked about constructing gas pipelines through Azerbaijan or Armenia in the northwest to Europe. But all that has remained on paper due largely to financial reasons plus the complexities that come with bringing together several nations willing and able to contribute to the multibillion-dollar projects.

Iran’s separation from the lucrative global LNG market becomes all the more conspicuous when compared to tiny Qatar that holds almost 30% of the global market and extracts almost all of the gas from the huge South Pars Gas Field it shares with Iran in the Persian Gulf.

Iran has 34 trillion cubic meters of known natural gas reserves, the largest in the world ahead of Russia with 32.6 trillion cubic meters, according to BP estimates.