According to mass media, two Iranian companies have signed an agreement on the construction of a gas pipeline to transport natural gas from the South Pars field through Iraq and Turkey to Europe.
“Two Iranian companies have signed an agreement on the construction of the 1,300 kilometer pipeline. Its cost is estimated at $2.3 billion, which is to provide the export of gas from Iran to Europe. The Iranian gas pipeline IGAT-6 will be constructed, starting from the largest gas field of South Pars through neighboring Iraq,” Tass cites Press-TV.
The contract was signed by the Iranian engineering company for development of the gas industry (IGEDC) and the Pasargad company for the development of energy. The customer project (IGEDC) is to pay for 25% of construction, operation and transportation. Other investments will be provided by the state National Fund of Iran. Investments will be compensated in the future due to gas exports to Iraq, Iraqi Kurdistan and Turkey.
The length of the pipeline to the boarder with Iraq will be 590 km. The construction of the pipeline and five compressor stations on its route will take us two years.
Senior analyst of Uralsib Capital Alexei Kokin said in an interview with a correspondent of Vestnik Kavkaza that the Iranian gas may compete with Russian in the European market, but no earlier than in 2025-2030. “Iranian gas is a known threat to Russian exports, and it is being discussed not the first day, but analysts consider as a long-term issue, because the construction of pipelines is a costly-based and difficult project. The relief in Iran and Turkey is very complex and the distance is too large. But the most important thing is that Iran and Turkey rarely agree on political issues. It worth noting that the Iranian gas is an absolute competitor for Gazprom in the Turkish market where it can be cheaper than Russian because of low transport price,” the expert said.
According to his estimates, the pipeline will be able to supply about 15-20 billion cubic meters of gas per year. “I think it is the maximum volume that Iran will be able to supply, but it is possible to achieve the aim only by 2025-2030,” Alexei Kokin noted.
The leading analyst at the National Energy Security Foundation Igor Yushkov recalled in his turn that Iran has problems with the gas transport infrastructure.
“The gas pipeline from Iran to Turkey works but it supplies about 6 billion cubic meters a year. The internal Iranian gas pipeline network is poorly developed that is why they export only 6 billion cubic meters to Turkey. Iran purchases 9 billion cubic meters from Turkmenistan. Certainly, Russia was frightened long ago that Iran would become an alternative supplier of gas to Europe. It is possible that sanctions was removed from Iran in order to achieve this goal,” he pointed out.
“Americans and Europeans will fully support the idea of building a gas pipeline from Iran to Europe at the political level. But when investments start being discussed then European companies will choose Russia as the main supplier, as our project is less risky,” Igor Yushkov expressed his confidence.