Caspian Energy Project Gains Fresh Momentum

Caspian Energy Project Gains Fresh MomentumCaspian Energy Project Gains Fresh Momentum

Iran signed an agreement with a Scottish energy solution provider on Tuesday to push for a plan to establish an extensive power network in the Caspian Sea region that would enable more than 30 countries to exchange electricity.

The agreement was signed in Tehran by the Institute for International Energy Studies, an affiliate of Iran's Oil Ministry, the Research and Training Center of Iran Chamber of Commerce, Industries, Mines and Agriculture, and Petro Development Scotland LLP to study the feasibility of the power project.

The proposed project, called Caspian Energy Network, is an effort to use Iran's immense natural gas resources to boost power generation and export, and establish a far-reaching network that will improve power stability in the region.

The three sides called on the Caspian littoral states to join the pact.

Azizollah Ramezani, director of international affairs at the National Iranian Gas Company, who pioneered the plan two years ago, said on Tuesday that using natural gas for power generation has advantages for a country that has the world's largest gas reserves.

"The costs of power transmission technologies and operations are down," Ramezani said.

"The idea is for Iran, Turkmenistan, Azerbaijan and other countries to distribute their electric output in an interconnected network to draw on the same network when they need."

Iran currently exports natural gas via pipeline to Turkey, Armenia and Azerbaijan.

But Ramezani said expanding gas pipelines for export faces operational limitations, adding that Iran is a long way from streamlining its liquefied natural gas exports, as some LNG production projects are struggling to pick up pace and customers are limited.

That leaves the gas-rich nation with an economically viable option of electricity production using its huge gas resources.

------- Forming the Project

According to Ramezani, Iran and Turkmenistan can form the backbone of the Caspian Energy Network, but Russia and Qatar can jump on the bandwagon as the four countries hold nearly 70% of global gas reserves.

"At least 10 countries can contribute to the project and if we expand the circle, it will include more than 30 countries," he said.

The idea for Caspian Energy Network was initially proposed by NIGC in a conference in Ashgabat, Turkmenistan in 2014 where Iran called for greater energy cooperation in the region.

The proposition was later developed into a plan to form a regional power network in cooperation with Chris Cook, director of Petro Development Scotland, who is also a research fellow at the University College London.

The call for tapping into the region's energy potential comes as the Middle East's second-largest economy has done little over the years to draw crude oil or natural gas from its Caspian reserves.

The sea holds an estimated 48 billion barrels of oil and more than 8 trillion cubic meters of natural gas in proven and probable reserves. But Iran's energy projects are largely concentrated in the south, where the country's lion's share of oil and gas output originate.