Iran and its neighbors hold more than 70 percent of world’s total gas reserves. Iran, Russia, Qatar and Turkmenistan are world’s largest gas reserves’ owners, respectively.
Iran’s littoral neighbors – in the north and south – enjoy significant gas reserves. On the other hand, Iran’s eastern and western neighbors are in dire need of gas and power. So, Iran can play the role of a regional hub for gas or power exports, according to Azernews. But in practice, Iran is importing and exporting only a limited amount of gas and power.
The five littoral states of the Caspian Sea have in total about 85 trillion cubic meters (45 percent) of the worlds’ proven gas reserves. To meet their constant energy security, the Caspian littoral states have no other way but to reach the European and Chinese markets.
No Caspian littoral state, except for Russia, views European markets as a potential gas market by 2019. Turkmenistan is still hesitating to export its gas via Trans-Caspian Gas Pipeline and instead prefers to put its focus on the eastern markets. This comes as Russia’s gas export to Europe decreased by 14.3 bcm in 2014 compared to the previous year. On the other hand, Europe is planning to lessen by 25 percent its dependence on Russian gas by 2020.
To this end, negotiations are underway over establishing a gas pipeline among Turkmenistan, Afghanistan, Pakistan and India (TAPI). Iran and Pakistan have agreed to extend a gas pipeline project, which is expected to carry natural gas from Iran to its eastern neighbor by 2017.
On the other hand, Iran and Russia have expressed opposition to the Trans-Caspian Gas Pipeline project for exporting Turkmenistan’s gas to Europe through Azerbaijan. As a result, Ashgabat needs to develop a comprehensive plan to diversify its gas markets because Iran and Russia seem to have no intention to import further gas from Turkmenistan.
Iran plans to raise its gas production to 365 bcm/a by 2018. Meanwhile, the country’s gas export would reach 80 bcm/a by 2022. Iran’s 20-Year Vision Plan has envisaged exporting gas to Europe. At present, Iran has to export 52 bcm/a of gas, based on signed memorandum of understandings (MoU) and agreements to Iraq, Oman, Pakistan and Turkey. It exports 10 bcm/a of gas to Turkey annually.
At the same time, Europe has decided to decrease its gas import from Russia by about 25 percent (45 billion cubic meters) by 2025. This is part of a larger plan to decrease the block’s dependence on Russia’s gas which is standing now at 27 percent. If become operational, the decision would prepare the ground for Iran and Azerbaijan’s export to Europe.
