Sending gas to Europe not makes commercial sense for Iran, expert says
By Aynur Karimova
Matthew Bryza, the director of the Tallinn-based International Center for Defense Studies, believes that sending gas to Europe does not make commercial sense for Iran.
He told Trend on October 19 that Iran is surrounded by power-hungry countries such as UAE, Oman and Kuwait, and supplying blue fuel to these countries is beneficial for Tehran.
“There are other countries that would like to buy Iranian gas, and it is a lot cheaper, a lot easier, and you don’t need to build that infrastructure, you just send it to your neighbors,” the expert said.
Bryza also noted that it is unlikely that Iran will supply gas
to Europe as it does not make much sense from an economic point of
view.
“There is not enough infrastructure now to get it [gas] to Turkey,
and down to Europe, so there has to be a lot of investment in that
infrastructure,” he said.
While expert did not rule out the possibility of gas supplies to Europe, he did say that it will depend on three factors: if demand in Europe goes up, Iran produces gas beyond the volume consumed in its neighborhood and sanctions on Tehran are lifted.
Iran, whose economy was battered by the international sanctions imposed on the country over its nuclear energy program, has long been eyeing to supply the European Union with its natural gas. Expecting a speedy removal of sanctions under the recent nuclear deal signed between world powers and Iran, Tehran seems close to reaching this goal.
Europe is also eager to engage in close energy cooperation with the Islamic Republic, especially after its relations with major energy supplier Russia have been spoiled over the Ukraine crisis. The EU hopes to import gas from Iran, which has some of the world's largest reserves, to reduce its dependence on Russia.
However, experts exclude the possibility of supplying Iranian gas to Europe in the coming years, as it lacks the necessary infrastructure.
The geographical location of Iran, which holds 33.8 trillion cubic meters of proven natural gas reserves, makes it possible for the country to transit gas to markets in Europe only via routes going through Turkey or Azerbaijan.
Azerbaijan is already on the path to exporting not only its own natural gas to Europe, but Iran’s as well. Although international sanctions are still in place, Tehran seems willing to consider the idea of cooperating with Azerbaijan on the Southern Gas Corridor project, which aims to bring natural gas from the Caspian Sea to the European Union.
In August, Iran's Communications and Information Technology Minister, Mahmoud Vaezi, told Trend that Tehran would cooperate with Azerbaijan on gas transportation to Europe through the Southern Gas Corridor.
“Transportation through Azerbaijan is one of the routes of bringing Iranian gas to Europe,” Vaezi noted. “I believe we will be able to cooperate with Azerbaijan in the use of the Southern Gas Corridor. We have held talks in this regard with Azerbaijan's energy minister and the relevant structures.”
The Southern Gas Corridor is a priority energy project for the EU. It envisages the transit of gas from the Caspian Sea region to European countries through Georgia and Turkey.
This ambitious project aims to diversify the routes and sources of energy supply, which will enhance Europe's energy security. The Southern Gas Corridor project will ensure Caspian gas supplies to European markets for the first time in history.
At its initial stage, the primary source of gas for the pipeline will be from Stage 2 of the Shah Deniz field. Other sources could also connect to the pipeline at a later stage.
As part of the second stage of development of the field, gas will be exported to Turkey and European markets via an expanded South Caucasus Pipeline and the construction of both the Trans-Anatolian and Trans-Adriatic pipelines.
It is believed that TANAP, which will later be linked to TAP, could become a reliable route for supplying Iranian gas to Europe. By joining TANAP, Iran is sure to strengthen Azerbaijan’s regional position as a transit country.
This will not only bring economic benefits, but also political dividends that will be much more significant. In this regard, Azerbaijan should mobilize its diplomatic efforts to persuade Iranian officials to connect the existing infrastructure to TANAP and TAP.
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Aynur Karimova is AzerNews’ staff journalist, follow her on Twitter: @Aynur_Karimova
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