Perspectives of Iran gas – South Pars as global energy factor

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Perspectives of Iran gas extraction and transit, in particular, current stage of realization of the Southern Pars project, as well as international and regional political and economic tendencies, connected with it, were presented by Deputy Director of Noravank Scientific-Educational Fund Sevak Sarukhanyan on March 28 in Yerevan. As a REGNUM correspondent informs, several Armenian experts and analysts were present at the event.

According to Sarukhanyan, by the end of 2004, proven gas reserves totaled 7.1 trillion of cubic meters in South and Central America, 7.32 trillion m³ – in North America, 14.06 trillion m³ — in Africa, 14.21 trl m³ — in Asian-Pacific region, 64.02 trl m³ — in Europe and Eurasia, and finally 72.83 trl m³ — in Middle East. At the same time, 28.5%, 15.2%, and 14.1% of world energy balance correspondingly fall on Russia, Iran, and Qatar. Accordingly, parts of Russia, Iran, and Qatar in world gas export vary near 34%, 1%, and 1%.

Meanwhile, as Sarukhanyan stressed, gas usage will triple in the EU by 2020. According to the expert, such drastic rise of the fuel’s consumption will be accompanied by sharp reducing of gas extraction in Norway, and little by little strengthening of the Russian monopoly concerning Turkmen and Uzbek gas transit to Europe. According to Sarukhanyan, increasing of Russian gas supply to Europe will be accompanied by diversification of its transit routes. During the next 15-20 years, big part of Russian gas will be supplied to Europe through three main routs: 120-150 billion m³ — through Ukraine, 50-70 billion m³ — through the North-European pipeline, 50-70 billion m³ — through Norwegian pipeline system, taking into consideration decreasing of gas production in Norway. In context of signing Russian-Chinese agreements, Russia will, according to the expert, direct considerable part of the Russian gas from Siberia to China. “Even, if to take into consideration possible increase of Russian gas to EU, European ‘negative’ gas balance will reach 150 billion m³ by 2025,” believes the Armenian expert.

According to his prognosis, solving problem of missing gas, Europe has chosen Iranian South Pars project. It is known as world biggest natural gas deposit, which may be connected with Europe by pipeline. According to Sarukhanyan, South Pars contains huge gas reserves of best quality, which are still uncontrolled by USA, Russia, and China. According to the presentation’s information, 8 South Pars’ sections are completely ready; every one produces 25 million m³ per day. Annual production at these 8 sections totals 73 billion m³.

Mentioning rival projects of Iranian gas export, the Deputy Director of Noravank Fund conditionally named them the ‘West’ and the ‘East’ ones. West Project is route Iran-Turkey (South Caucasus)-Europe, East Project – Iran-Pakistan-India. Actually, according to Sarukhanyan, Pakistan and India together pretend to 40 billion m³ of Iranian gas, and Europe – to 150 billion m³. “Politicization of the question is caused by fact that behind Iran and Pakistan stands threatening shadow of Chinese People’s Republic, which is pretending to the lion’s share of Iranian gas by 2020. The USA is worried by Chinese strategy of energy import, based on two fundamental principles: seller of oil and gas guaranties stability of supplies, and buyer (i.e. China) guarantees their security at whole route. It naturally strengthens military-economically China and Shanghai Organization of Cooperation in regions of supply and transit”, stated the expert.

What does Iran want, asked he himself? According to Sarukhanyan, basically Iran prefers European market, because EU countries are ready to buy gas at European prices. As for Pakistan and India, they suggested Iranian side making long-term agreement on gas supply at fixes prices, which basically does not satisfy Iran. At the same time, Iran skillfully uses the East Project in order to have additional arguments in his European policy, as well as in talks on nuclear problems. From other point, characterizing US position on the question, Sarukhanyan stressed, energy strategies of US and EU fundamentally differ. It was obviously demonstrated by the American way of Iranian problem’s solution. “It is more favorable for the USA, when Europe consumes Russian gas, but not Iranian one. From the other side, US general aim is not to allow Iranian gas to get into China. American-Indian agreement on construction nuclear reactors, aimed at decreasing India’s energy needs, may be connected with the fact”, stated he.

Mentioning perspectives of Iran-Armenia-Georgia-Ukraine-Europe route, Sarukhanyan pointed out, construction of new pipeline in Ukrainian territory would be very expensive. It will take from $35 billion up to $40 billion, because 90% of existing infrastructure are used for transit of the Russian gas. Hypothetical transit incomes of Armenia and Turkey, for transition of Iranian gas, may approximately total $160 million for Armenia (in case of transit of 50 billion m³ annually), and for Turkey up to $4 billion (in case of transit of 150 billion m³ annually), according to the expert.