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Natural gas of Iran
admin 2015-01-09 07:06:22
After BP, Shell, Total and ENI were forced to abandon South Pars by President Clinton in the 1990s,Iran’s hopes to become a global LNG exporter on Qatar’s model because unrealistic high domestic demand for power generation outdated technology, ageing oilfields and lack of international finance.
Iran will not become a major gas supplier to Europe or Asia even if sanctions are lifted. Gas export projects are hugely capital-intensive with long payback periods and Iran can simply not attract the funding or technology from Western energy majors even if sanctions are lifted.
Qatar’s North Field (called South Pars by Iran) enabled it to become the world’s largest LNG Equipment exporter. Iran, isolated by sanctions, squandered its future with its confrontation with the West over nuclear weapons and Lebanon/Syria. So I was surprised to read Foreign Minister Javad Zarif publicly offer Iran as a long-term gas supplier to Europe the day Vladimir Putin sent Russian troops into Crimea.
Will the Ukraine crisis enable Iran to replace Russia as Europe’s gas supplier? No. This scenario is a diplomatic, economic and even logistical non-starter.Iran produces more natural gas than Qatar but it is forced to provide 78 million people with heat,electricity, food and fuel. Domestic gas demand, a mere 26bcm in Qatar, is 156bcm in Iran, making major exports unthinkable even if sanctions are lifted.
Iran has actually been forced to import natural gas from Turkmenistan to ease gas shortages. Iran’s winter heating needs are so great it has been unable to fulfill gas contracts with Turkey, let alone LNG exports to Asia.
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