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All Iranian gas export routes to EU deadlocked

Mon 6 08 2012

Despite Iranian official's statements about finalising the country's gas exports to some EU countries, economic advisor of the European Union Mehrdad Emadi told Trend that all of the Iranian National Gas Company's negotiations with several European countries have reached deadlock.
"An Iranian delegation travelled to Italy, Greece, Turkey, Cyprus, Spain and Switzerland 18 months ago to encourage them to import Iranian gas. Iran even offered about 40 per cent discount to one European gas company, but all of these efforts failed," Emadi said on Wednesday.
Emadi added that a Chinese consortium promised to produce a tanker to carry Iranian liquefied gas to two European ports in 18 months, one of which was at Malta. Despite Malta's agreement to receive Iranian liquefied gas and Iran's promise to pay all expenses of necessary building infrastructures, this country had to withdraw because of EU pressure and also tightened supervision over Maltese banks. The other port is located in Greece. However, Iran failed to finalise any agreement to transit its gas to both aforementioned ports.
The Iranian semi-official Fars News Agency reported on July 24 that Iran is finalising negotiations with Greece and Switzerland to export gas. On the other hand, Iranian Oil Minister Rostam Qasemi underlined last week that Iran has several projects to export gas to the west and eastern countries, including the European Union through Turkey, without mentioning the route.
Iran has addressed contrary routes for exporting gas to EU so far. The National Iranian Gas Export Company which was dissolved on July 20, 2012 and Swiss Elektrizitaetsgesellschaft Laufenburg (EGL) signed a 25-year deal in March 2008 to deliver 5.5 billion cubic meters of gas per year.
Iran has repeatedly announced that its gas is planned to be transited through the Trans Adriatic Pipeline (TAP) to Switzerland. However, Michael Hoffmann, director of external affairs and communications at the TAP project told Trend on July 15 that the pipeline does not intend to transport any gas from Iran.
TAP aims to transport 10 bcm of gas from the Shah Deniz Stage II development from Azerbaijan.
Emadi added that EGL has put preconditions for the import of Iranian gas. "EGL concerns would be slapped by the U.S. sanctions and asked Iran to undertake 70 per cent of the costs if EGL is affected by sanctions. He said that Iran insisted on 50 per cent compensation no more.
The second potential route for transit of Iranian gas through Turkey to EU is via the Nabucco West Pipeline which already excluded the Iranian name from gas suppliers' list.
The little known project of Iran-Turkey-Europe Natural Gas Pipeline Project (ITE) is another option for transporting Iranian gas to the EU. According to the ITE official website, for a transit passage of natural gas sourced in Iran to take place through Turkey, the two countries had already signed an agreement protocol on November 17, 2008.
"The total length of the pipeline under the project is about 5000 km with a 35 mcmpd capacity with the Turkish section being about 1750 km. Turang Transit Transportation has obtained a natural gas pipeline certificate which is valid for 30 years, for the construction of the part of the pipeline between Iran at Bazargan/Dogubeyazit and the Ipsala Edirne/Greece border".
Last week, Iranian outlets reported citing the Greek Energia portal that Turang Transit will issue tenders in November-December this year for the construction of the Turkish section of the link and work is expected to begin next year for a 2016 start-up. However, this report has not yet been confirmed officially.
According to BP's last annual statistics published in June, Iran produced 138.5 billion cubic meters (bcm) of natural gas in 2011, while its gas consumption was 136.9 bcm during same period. Iran has only 1.6 bcm/y of surplus gas per year. However, Iran says that it is preparing to double gas production by launching new phases of the joint South Pars field. Iran is producing about 240 mcm/d of gas from operating 10 of 29 phases at South Pars field each day.

Azerbaijan, Baku, July 25 /Trend, corr. D.Khatinoglu/