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Gas Export Talks With Afghans

Gas Export Talks With AfghansGas Export Talks With Afghans

Serious negotiations are underway with Afghanistan's private sector to export Iran's natural gas to supply the border regions, the chief executive of National Iranian Gas Export Company said.

"There are two initiatives to export the strategic commodity to the war-ravaged and impoverished neighboring country, one of which is through extending pipelines. Moreover, natural gas can be transferred to Afghanistan in the form of compressed natural gas," Alireza Kameli was quoted as saying by IRNA.

Underscoring the fact that Iranian officials are awaiting Afghanistan's private sector proposal, Kameli said, "As soon as their plan is submitted and based on the amount of natural gas they want to purchase, talks will resume deciding about the price."

According to the official, in case Afghans show interest in receiving the commodity via a pipeline, they should make it clear to what border point the pipeline will be extended as it affects the total price.

Gas experts opine that Afghanistan is a potential and lucrative market for Iran’s gas and it is very likely that it will buy gas from Iran. However, they do not seem to be prepared to import natural gas from us due to their undeveloped energy infrastructure.

  Once a Major Exporter

Natural gas was Afghanistan's sole economically significant export in 1995, going mainly to Uzbekistan via pipeline.

Natural gas reserves were once estimated at 140 billion cubic meters. Production started in 1967 with 342 million cubic meters but had risen to 2.6 billion cubic meters by 1995. In 1991, a new gas field was discovered in Chekhcha, Jowzjan Province.

In August 1996, a multinational consortium agreed to construct a 1,430-km pipeline through Afghanistan to carry natural gas from Turkmenistan to Pakistan, at a cost of about $2 billion.

However, US airstrikes led to cancellation of the project in 1998 and financing of such a project has remained an issue because of high political risk and security concerns.

  Ongoing Initiatives

Iraq, Pakistan and Oman are among other potential regional customers to Iran's natural gas whose plan to import the commodity has not been developed yet. However, they are taking serious steps to launch major initiatives in the near future.

Tehran and Baghdad signed a draft deal in 2013 to transfer Iran’s gas to two Iraqi power plants. Plans include exporting 30-50 million cubic meters of gas per day to Iraq, the revenues from which are estimated at $4-6 billion.

The plan has been delayed since 2015 because of not only security issues after the self-styled Islamic State militants took control of large swathes of Iraqi territory, but also technical and financial issues, which seem not to have been settled yet.

The idea of a pipeline stretching from Iran's gas-rich southern regions to Pakistan goes back to the 1950s. But the first real step to materialize the project was taken when the three sides signed a preliminary agreement in 1999. Since then, the project has hit multiple financial and political hurdles.

Iran-Oman pipeline will run over a distance of about 200 kilometers, from Roodan to Kooh Mobarak, in southern Hormozgan Province to Sohar Port in Oman, and could go as deep as 290 meters from the sea surface, passing through the UAE's territorial waters before reaching Oman’s shores.

Kameli, however, said UAE officials have not agreed to let Oman use their territorial waters to pass its gas pipeline through their waters to import Iran's natural gas.

Financialtribune.com