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Gas Exports to eu Would Take 5 Years
Energy

Gas Exports to eu Would Take 5 Years

Iran would take at least five years to start exporting natural gas to the European Union if sanctions were removed, industry experts said.

Reuters last month reported that the EU was 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 due to the Ukraine crisis.
Russia meets a third of Europe's gas 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.
Iran possesses the world's second-largest gas reserves after Russia but has also been hit with sanctions, in this case over its nuclear program. Iran and world powers are trying to conclude a final agreement on those sanctions by a Nov. 24 deadline.
Industry experts at the European Autumn Gas Conference in London said it would take a minimum of half a decade for Iranian exports to start if sanctions were lifted.
"To my understanding, Iran would have to invest a lot in infrastructure. This would take at least five years," said Matthias Keuchel, general manager of Enerjisa Dogal Gaz Company.
"There would also need to be negotiations with Iran on gas sales, which could happen at the same time - but five years could be a realistic term for that," he added.
Tatiana Mitrova, head of oil and gas at the Energy Research Institute of the Russian Academy of Sciences, agreed with that timeframe but said booming domestic demand for gas in Iran could mean exports would be stifled.
"If all restrictions are removed and economic growth starts domestically, (Iran) will need more gas for its internal market and we could see the same situation as Egypt in that its export potential is constrained by domestic needs," she said.
Iran might also prefer to focus on liquefied natural gas (LNG) rather than investing in pipeline infrastructure.
"It is very difficult for Iran to do both - pipeline and LNG. Between the two - supplying Europe or the Asia Pacific, my sense is they are more keen on supplying LNG (to Asia) if they can get the liquefaction sorted," said Ashutosh Shastri, director at EnerStrat Consulting, an energy strategy consultancy based in London.

 

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