Falling Gas Prices Give Iran Dose of Realism

Iran’s plans to export gas to Europe already looked unfeasible given booming domestic demand. Low prices may be the final straw.

Reality has caught up with Iran, with its aim of exporting gas to Europe kicked into the long grass. Alireza Kameli, Iran’s gas exports chief, said on 11 September that the low cost of gas makes it uneconomical to invest in the necessary infrastructure.

Gas prices have been falling globally (see chart, p16). Additional US and Australian volumes coupled with slow demand growth mean “global gas prices are set to stay under pressure” for the remainder of the decade, the IEA says (MEES, 17 June).

In comments carried by the petroleum ministry’s Shana website Mr Kameli says that Iran is still looking to Europe, but is examining ways to do so that “do not include construction of new pipelines.” He raised the prospect of piggybacking onto other countries’ existing projects such as the Trans Anatolian Natural Gas Pipeline (Tanap) project taking gas from Azerbaijan to Turkey’s border with Bulgaria and Greece. However, this would entail a lengthy process of negotiations that has not yet begun. (CONTINUED - 941 WORDS)