Iran's Gas Official: Gas Exports to Europe Require €10 Billion Investment

The international director of the National Iranian Gas Company announced that exporting gas from Iran to Europe requires a €10 billion investment across all sectors of the gas industry along the route. Azizollah Ramazani stated on Friday, August 9, in an interview with the Oil and Energy Information Network, Shana, that currently, no new developments have occurred regarding gas exports to Europe, and given the current positive conditions, a new will must emerge, and the parties should pursue the matter through negotiations. He noted that this requires intensive work and is currently at the level of position statements, adding that studies by the European Parliament indicate that Iran has the potential to export 25 to 30 billion cubic meters of gas annually to Europe. Amir Hossein Zamani Nia, the international deputy of the Ministry of Oil, also stated at a conference held on July 29 in Vienna that Iran could deliver its gas to the European market within the next six to ten years. He added that Iran prefers to export gas in the form of LNG rather than through pipelines. Iran currently produces 660 million cubic meters of gas daily, but oil officials have announced that this figure will exceed one billion cubic meters by 2018. Following the July 23 agreement between Iran and six world powers, Iran hopes that Western companies will enter the Iranian oil and gas sector. Zamani Nia mentioned at the Vienna conference that Iranian oil and gas fields will require $185 billion in investment over the next five years. Ramazani now states that 'Iran is the best source of gas supply for Europe.' According to him, a study conducted by the European Parliament has shown that 12 countries can export gas to this continent, with Iran being among these countries and the best source of gas supply. This oil official's reference is to a 47-page report by the European Parliament titled 'Europe Seeking Alternatives to Russian Gas,' published on its official website last October, which lists several countries that can supply gas to the EU in the 'long term.' However, the European Parliament report does not state that Iranian gas is 'the best source,' and these remarks apparently reflect the opinion of this high-ranking Iranian oil official. In recent months, especially after the comprehensive nuclear agreement, several major companies, including Total of France, Royal Dutch Shell, Eni of Italy, British Petroleum, and others have expressed hope that Western sanctions against Iran will be lifted to reconsider re-entering Iranian projects. In this context, Shell's finance director stated on Friday that if international sanctions against Iran's oil and gas industry are lifted, the company would be willing to return to Iran. According to Platts, Simon Henry also pointed out the high risk of Iran's old contracts with foreign companies, which were of the 'buy-back' type, stating that the Iranian gas sector is attractive to them on the condition that Iran also shares the project risk. Iran has recently announced that it has designed a new type of oil and gas contract that will be unveiled in the next two to three months. Mr. Henry also mentioned the company's $2 billion debt to Iran, stating that they are waiting for the lifting of sanctions against Iran to settle their debt. This company had purchased oil from Iran in 2012 but has been unable to settle its debt due to sanctions. It is expected that sanctions against Iran will be lifted by the end of this year.