Iran Not Ready to Replace Russia Gas

Iran Not Ready  to Replace Russia Gas
Iran Not Ready  to Replace Russia Gas

Iran is not ready to replace Russia as a main gas supplier if sanctions are lifted, Iran’s President Hassan Rouhani said in an interview with the Vesti on Saturday news program on the Russian Rossiya 24 television.

“As you know, Iran has in possession the largest deposits of gas,” Rouhani said. “But we lack behind in gas output and so we first think about domestic demands in our country.”

“We have problems in the winter from time to time but then, you know, there are lots of customers around us, in the east and in the west,” he said. “All our eastern, western and southern neighbors want to buy our gas which we will still have to extract.”

So “now the conditions are not like those when everybody thought that if Russia cancelled gas supplies, Iran would provide us with the same gas,” the Iranian president said adding that “our production is far from this stage.”

 “In recent years we have been expending efforts so that countries exporting gas can co-operate,” he said. “Competition should not be problematic. It should be healthy and should bring profits only to buyers and so damage exporters.”

“So in gas sphere as well as in energy sector, the most optimal way is co-operation and interaction,” Rouhani said underscoring that “We are looking to acting in coordination with Russia in all spheres.

The European Union is quietly increasing the urgency of a plan to import natural gas from Iran, as relations with Tehran thaw while those with top gas supplier Russia grow chillier, a European Commission source told Reuters in September

Two "ifs" - the removal of sanctions on Iran and the addition of some pipeline infrastructure - are not preventing EU planners preparing. "Iran is far towards the top of our priorities for mid-term measures that will help reduce our reliance on Russian gas supplies," the source said. "Iran's gas could come to Europe quite easily and politically there is a clear rapprochement between Tehran and the West."

Russia is currently Europe's biggest supplier of natural gas, meeting a third of its demand worth $80 billion a year. The EU has imposed sanctions on Moscow over the conflict in Ukraine, increasing the need for gas from elsewhere.

While sanctioned itself, Iran has the world's second largest gas reserves after Russia and is a potential alternative given talks between Tehran and the West to reach a deal over the Islamic Republic's nuclear program.

From the total 500 million cubic meters of gas produced per day, currently 5 percent is exported, Hamidreza Araghi, managing director of National Iranian Gas Company (NIGC), said in September, adding that Europeans, Indians, and Pakistanis are among the countries interested in gas imports from Iran.

Iran holds 17% of the world's proved natural gas reserves and more than one-third of OPEC's reserves.