Consortiums Key to Europe Gas Export

Consortiums Key to Europe Gas ExportConsortiums Key to Europe Gas Export

Narsi Ghorban, a prominent Iranian energy analyst from London University, in a recent lecture at the Sharif University of Technology in Tehran said, "The best strategy to export gas to Europe is by establishing consortiums. Needless to say, marketing in Europe is another challenge with which Iran will have to grapple."

Addressing a panel on 'The Best Oil Contracts for Iran', he said, "There are a couple of choices the first of which is transportation. Iran's geography has a strategic location through which pipelines pass. It can generate revenues by charging countries whose pipelines need to pass through Iranian territory. Another option is swap, that is exchanging oil and gas from the Caspian Sea littoral states with Iran's oil and gas from the southern fields.

"True, this approach is subject to huge investments…but we need to demonstrate that Iran was, is and will be the safest and the most secure route for the supply of oil and gas." His address at the prominent university was carried by the Persian Daily Ta'adol on Monday. Pointing to Iran's role as a major player in the Middle East, he noted, “The third alternative is the market; to put it simply, Iran can purchase oil or gas from its neighbors, in particular in the north, and export it all over the world.

"Iran is a well-known exporter and importer of oil and its byproducts because of which many specialists, myself included, believe that we do not need to swap energy so long as there is a market for such products."  

  Two Preoccupations

Iran's known gas reserves are in the neighborhood of 33.8 trillion cubic meters. Given its huge potential for gas production, especially in the Caspian Sea region, Ghorban is of the opinion that replacing gas with oil products ought to be high on the list of priorities. Injecting gas into oil fields to boost oil output, and generating electricity from gas flares seem to be his preoccupation.

On the critical issue of exporting natural gas to Europe, the lecturer said, "The controversy over this issue is (the role of) Turkey which intends to take advantage of its strategic proximity. On the other hand, Iranian officials seem to insist that gas export to Europe should be in a manner that excludes the role and presence of a third country. It is my conviction that founding consortiums will be the best way to address such issues."

The expert also believes that creating an integrated gas network in Asia will be beneficial for all the countries because it will help them to not only get rid of seasonal gas disruptions during peak demand, but also help settle price disputes between producers and consumers. "It can be said beyond an element of doubt that such a network will cut project development costs and create jobs in Asia."

Iran holds 17% of the world's proved natural gas reserves and more than one-third of OPEC's reserves. Iran is a relatively minor and strictly regional exporter of natural gas via pipelines to three neighboring countries – Turkey, Armenia, and Azerbaijan. Turkey receives more than 90 percent of Iran’s natural gas exports under a long-term contract.

Narsi Ghorban is managing director of Narkangan Gas to Liquid International Co.  He also serves as chairman of Qeshm Energy International, secretary of the Environment & Energy Commission at the International Chamber of Commerce's Iran Committee, and director of the International Institute for Caspian Studies (IICS). Ghorban is a member of the Iran Association of Energy Economics as well as a member of the Tehran-based International Institute for Caspian Studies. He has a Ph.D. in petroleum economics from the University of London.